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Commission Explains Mandatory Trade

Mandatory trade is the setting of conditions by the seller of goods or services to buyers that if not met, the actual transaction can be withheld. Under Section 87K of
19 Dec 2016 11:01
Commission Explains Mandatory Trade
Commerce Commission

Mandatory trade is the setting of conditions by the seller of goods or services to buyers that if not met, the actual transaction can be withheld.

Under Section 87K of the Commerce Commission Decree 2010 (CCD2010), no person shall, in the course of trade, sell goods at retail or supply services if the person, whether as principal or agent, indicates in the course of bargaining with any purchaser or prospective purchaser of those goods or services-

(a) that the goods will be sold or the services will be supplied only if the purchaser or prospective purchaser sells or arranges the sale of secondhand goods to the seller or to a person nominated by the seller; or

(b) that the terms and conditions on which the seller will sell those goods or supply those services will be less favorable than those upon which he would make them available if the purchaser or prospective purchaser were to sell or to arrange the sale of secondhand goods to the seller or to a person nominated by the seller.’

Any trade practice that imposes or is thought to impose an inequitable advantage to the seller can be deemed mandatory under the CCD2010.

Examples of mandatory trade advertisements

l ‘Trade in. Jump in – Trade in any gaming console and save up to $150 for a new Xbox at X 2011. Price without trade in differs.

 

l For a limited time we are offering you $75 off any of our Lightweight Lithium golf batteries when you trade in your old golf battery and charger – irrespective of age or condition!

We have in stock a wide range to suit almost any electric golf trolley. However, price without trade-in differs

 

l Should You Sell Your Car or Trade it In? – The Math Might Surprise You!. Conditions for trade-in should not be missed.

Why is a mandatory trade an economic problem?

The freedom to pursue a livelihood, operate a business, and otherwise compete in the marketplace is essential to any free enterprise system.

Accordingly, the law prohibits a business from unfairly profiting at a competitor’s expense.

Options give investors the right, but no obligation, to trade goods or services at predetermined prices, within a certain period of time specified by the option expiry date.

Making it mandatory, poses the risk of removing or lessening choice, thus creates an anti-competitive environment of trade.

From consumers’ perspective, freedom of choice is essential in ensuring fair trade in a given market.

Imposing mandatory conditions will rob the market its fairness and other unscrupulous conducts such as exploitation, price gouging is likely to take place.

This distorts the prices of goods and services and can create inflationary repercussions.

nNext Week: Accepting Payment without supplying

nThis is a weekly column compiled by the Fiji Commerce Commission in the hopes of raising awareness on what the FCC does so people can benefit from developing a better understanding. For more information/details on Fiji Commerce Commission and Commerce Commission Decree 2010, visit our website on http://www.commcomm.gov.fj or join their Facebook page at https://www.facebook.com/commcomm.gov.fj

What to do when you encounter a trader offering for sale items without price statements?

  1. Raise the issue in writing with the supplier
  2. Report the matter to the Fiji Commerce Commission by:
  3. Personally visiting any of the Commission’s office with evidences to prove your allegation;
  4. Email your complaint to helpdesk@commcomm.gov.fj or write to the Chief Executive Officer, Fiji Commerce Commission, P O Box 5031, Raiwaqa or call 3372178 or 8911619.
  5. Or visit the Commission’s website and download the complaint and statement forms from it, fill them, scan and sent to helpdesk@commcomm.gov.fj.

 

 

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