WHEN IS A SALES ACT CONSIDERED DECEPTIVE OR UNCONSCIONABLE?

Image Source

Published — January 21, 2021 

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

Read also: Unfair and unconscionable sales acts and practices

• A deceptive act by a seller or supplier whether it occurs before, during, or after the transaction is prohibited

• Taking advantage of the consumer’s physical or mental conditions is considered unfair or unconscionable sales act

• There are factors in considering whether an act or practice is unfair and unconscionable

Most people think “selling” is the same as “talking”. But the most effective salespeople know that listening is the most important part of their job. – Roy Bartell

The consumers’ interest and general welfare are protected under the law. The consumers, in purchasing goods from sellers, or engaging the services of repair and service firms, are protected from deceptive, unfair and unconscionable sales acts and practices of sellers and service firms.

For clarity, what is a consumer?

The law says:

Consumer means a natural person who is a purchaser, lessee, recipient or prospective purchaser, lessor or recipient of consumer products, services or credit. The law says, “natural person”. Thus, consumer refers to an individual human being. The definition excludes “juridical persons” such as corporations or partnerships.

In engaging a transaction with a seller, the consumer is sometimes at a disadvantageous position as the seller may unreasonably control the price of the goods or services being sold. The good news is that we have laws protecting the consumers from deceptive, unconscionable sales acts or practices of sellers.

When is a sales act or practice considered deceptive?

The law says:

A deceptive act or practice by a seller or supplier in connection with a consumer transaction may be committed before, during, or after the transaction. An act or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or seller, through concealment, false representation or fraudulent manipulation, induces a consumer to enter into a sales or lease transaction of any consumer product or service.

Without limiting the scope of the above paragraph, the act or practice of a seller or supplier is deceptive when it represents that:

1. a consumer product or service has the sponsorship, approval, performance, characteristics, ingredients, accessories, uses, or benefits it does not have;
2. a consumer product or service is of a particular standard, quality, grade, style, or model when in fact it is not;
3. a consumer product is new, original or unused, when in fact, it is in a deteriorated, altered, reconditioned, reclaimed or second-hand state;
4. a consumer product or service is available to the consumer for a reason that is different from the fact;
5. a consumer product or service has been supplied in accordance with the previous representation when in fact it is not;
6. a consumer product or service can be supplied in a quantity greater than the supplier intends;
7. a service, or repair of a consumer product is needed when in fact it is not;
8. a specific price advantage of a consumer product exists when in fact it does not;
9. the sales act or practice involves or does not involve a warranty, a disclaimer of warranties, particular warranty terms or other rights, remedies or obligations if the indication is false; and
10. the seller or supplier has a sponsorship, approval, or affiliation he does not have.

When is a sales act or practice considered unfair or unconscionable?

The law says:

An unfair or unconscionable sales act or practice by a seller or supplier in connection with a consumer transaction may occur before, during, or after the consumer transaction. An act or practice shall be deemed unfair or unconscionable whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer’s physical or mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of the producer, manufacturer, distributor supplier or seller.

In determining whether an act or practice is unfair or unconscionable, the following circumstances shall be considered:

1. that the producer, manufacturer, distributor, supplier or seller took advantage of the inability of the consumer to reasonably protect his interest because of his inability to understand the language of an agreement, or similar factors;
2. that when the consumer transaction was entered into, the price grossly exceeded the price at which similar products or services were readily obtainable in similar transaction by like consumers;
3. that when the consumer transaction was entered into, the consumer was unable to receive a substantial benefit from the subject of the transaction;
4. that when the consumer was entered into, the seller or supplier was aware that there was no reasonable probability or payment of the obligation in full by the consumer; and
5. that the transaction that the seller or supplier induced the consumer to enter into was excessively one-sided in favor of the seller or supplier.

---

Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

All rights reserved.

---

SUBSCRIBE NOW FOR MORE LEGAL UPDATES!

[email-subscribers-form id=”4″]