Restrictive Trade Practice
A restrictive trade practice is defined under Section 2(1)(nnn) of the Consumer Protection Act, 1986. The section covers all the price related deceit that the traders may indulge in to maximise their profits.
Restrictive trade practices are targeted at the consumers who are burdened with restriction and unjustified costs through the practices of the trader. The trader manipulates the price or the conditions of delivery of the product which results in restrictive trade practice. This affects the supply of goods and services in the market and includes:
- A compulsion to purchase, hire or avail any good or service in order to obtain any other good or service.
- A likely or definite rise in the price of a commodity due to the delay of the trader to provide the good or service.
Unfair Trade Practice
The 2019 Act has also introduced the concept of unfair contract. ‘Unfair Contract’ is defined under Section 2(46) and it refers to any contract between a consumer and a manufacturer or service provider or trader whose terms brings about a significant change in the consumer rights under the Act. These terms are namely such as:
- Requirement of excessive security deposits by the consumer in for facilitating the performance of obligations under the contract;
- Imposing penalty for breach of contract on the consumer which is not in proportion with the loss suffered due to such breach;
- Not accepting early debt repayment along with the applicable penalty;
- Allowing one of the parties to terminate the contract without any reasonable cause or unilaterally;
- Entitling one party to assign the contract to the detriment of the consumer and without his consent;
- Imposing unreasonable condition, obligation or charge on the consumer that puts him in a disadvantageous position.
Rights of consumers
Six consumer rights have been defined in the Bill, including the right to:
(i) Be protected against marketing of goods and services which are hazardous to life and property.
(ii) Be informed of the quality, quantity, potency, purity, standard and price of goods or services.
(iii) Be assured of access to a variety of goods or services at competitive prices.
(iv) Seek redressal against unfair or restrictive trade practices.