Consumer Protection Act, 2019: Unfair Contract and Unfair Trade Practice

The Consumer Protection Act, 2019 (CPA) defines an unfair contract term as a term that, contrary to the requirement of good faith, causes significant imbalance in the rights and obligations of the parties arising from the contract.

The CPA prohibits the use of unfair contract terms in consumer contracts. A consumer contract is a contract between a trader and a consumer.

The CPA provides a list of unfair contract terms that are automatically void. These terms include terms that:

  • Exclude or limit the liability of the trader for death or personal injury caused by the trader’s negligence
  • Exclude or limit the consumer’s rights to remedies for breach of contract
  • Require the consumer to pay a disproportionately high price for goods or services
  • Require the consumer to waive their rights under the CPA

The CPA also provides a list of unfair contract terms that are presumed to be unfair. These terms are not automatically void, but the trader must prove that they are fair.

Unfair Trade Practices

The CPA defines an unfair trade practice as any act or omission of a trader, in the course of any trade or business, which, for the purpose of promoting the sale, supply or use of any goods or for the provision of any service, adopts a method which is unfair or deceptive to consumers.

The CPA prohibits unfair trade practices. Some examples of unfair trade practices include:

  • False or misleading advertising
  • Bait-and-switch advertising
  • Pyramid schemes
  • Unsolicited calls or messages
  • Harassing or threatening consumers

The CPA provides for penalties for violation of its provisions. The penalties include imprisonment, fines, and the cancellation of the trader’s license.

Here are some MCQs on the Consumer Protection Act, 2019: Unfair Contract and Unfair Trade Practice:

  1. Which of the following is an unfair contract term?
    • A term that excludes the trader’s liability for death or personal injury caused by the trader’s negligence
    • A term that requires the consumer to pay a disproportionately high price for goods or services
    • A term that requires the consumer to waive their rights under the CPA
    • All of the above
    • The correct answer is all of the above. All of the terms mentioned are unfair contract terms under the CPA.
  2. Which of the following is an unfair trade practice?
    • False or misleading advertising
    • Bait-and-switch advertising
    • Pyramid schemes
    • All of the above
    • The correct answer is all of the above. All of the practices mentioned are unfair trade practices under the CPA.
  3. What are the penalties for violation of the Consumer Protection Act, 2019?
    • Imprisonment, fines, and the cancellation of the trader’s license
    • Only imprisonment
    • Only fines
    • Only the cancellation of the trader’s license
    • The correct answer is imprisonment, fines, and the cancellation of the trader’s license. The penalties for violation of the CPA are imprisonment, fines, and the cancellation of the trader’s license.