2. Un­fair Terms of Con­tract

Consumer Voice - - Report -

This is­sue was also de­lib­er­ated upon by Cen­tral Con­sumer Pro­tec­tion Coun­cil (CCPC), who sup­ported the plea that celebri­ties should be made li­able for ‘mis­lead­ing ad­ver­tise­ments’. The CCPC is a nom­i­nated body of ex­perts un­der the Con­sumer Pro­tec­tion Act, 1986, and is headed by the union min­is­ter of con­sumer af­fairs. In its meet­ing held ear­lier this year, it de­lib­er­ated on this is­sue and rec­om­mended reg­u­la­tion of ads that had celebrity en­dorse­ments. The union cab­i­net has to de­cide whether there will be a jail term for celebri­ties giv­ing mis­lead­ing en­dorse­ments, along with a mon­e­tary penalty, or only a penalty. This is­sue will be fi­nally de­cided on the ba­sis of rec­om­men­da­tions by a Group of Ministers. In any case, whether there is a jail term for celebri­ties or not, the law will be strong enough to de­ter ad­ver­tis­ers from re­leas­ing mis­lead­ing ads.

All con­tracts in In­dia have been judged on the ba­sis of ju­rispru­dence based on the In­dian Con­tract Act of 1872. For nearly 144 years, In­dian courts have up­held the va­lid­ity of all terms of con­tracts if the con­tract is validly en­tered into, and have re­fused to judge the rea­son­able­ness of terms of con­tracts once par­ties have bound them­selves to such con­tracts. The ma­jor ex­cep­tions are con­tracts in which mi­nors are par­ties or the ob­ject of the con­tract is against pub­lic pur­pose or pol­icy.

The Bill clas­si­fies six con­tract terms as ‘un­fair’. These cover terms such as (i) pay­ment of ex­ces­sive and (iv) one that puts the con­sumer at a dis­ad­van­tage. The stand­ing com­mit­tee has rec­om­mended that the Bill lay down prin­ci­ples that widen its scope to de­ter­mine whether a con­tract term is un­fair. This will al­low terms of con­tracts other than the spec­i­fied six to be clas­si­fied as un­fair. The con­sumer courts are be­ing em­pow­ered to de­clare such terms of con­tracts as null and void. This will cer­tainly re­verse the cur­rent trend of con­trac­tual ju­rispru­dence in B to C trans­ac­tions.

3. Set­ting up of a Cen­tral Con­sumer Pro­tec­tion Author­ity

The Bill es­tab­lishes a Con­sumer Pro­tec­tion Author­ity to in­ves­ti­gate into con­sumer com­plaints, is­sue safety no­tices for goods and ser­vices, and pass or­ders for re­call of goods and against mis­lead­ing ad­ver­tise­ments. It pro­vides teeth to this Bill whereby the Author­ity can in­ter­vene to pro­tect con­sumers’ in­ter­est in the mar­ket­place. While the present law has pro­vi­sions en­abling the cen­tral and state gov­ern­ments to file cases in con­sumer courts, hardly any such cases have been filed in the last three decades.

The Con­sumer Pro­tec­tion Author­ity will be able to in­ter­vene in the mar­ket in a wide num­ber of sit­u­a­tions that have been elab­o­rated in the Bill. It is likely to emerge as a reg­u­la­tory body for con­sumer pro­tec­tion. A sim­i­lar func­tion is be­ing served by the Bu­reau of Con­sumer Pro­tec­tion in the Fed­eral Trade Com­mis­sion (FTC) of the USA and the Direc­torate

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