Deceptive/ Unfair Trade Practices

Topics: Tort, Duty of care, Common law Pages: 20 (6482 words) Published: December 3, 2012
Deceptive Trade Practices and Tort Liability

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• What is the Scope and extent of liability in tort regarding deceptive trade practices undertaken by persons and what are the means of redressal for the same ?

• Whether the current status of development of liability in tort regarding fraudulent trade practices and awareness about the aforesaid is sufficient for adequate and timely redressal to consumers ?


• Deceptive Trade Practices – An Introduction.

• Breach of duty of care by the Tortfeasor.

• Important cases relating to Deceptive Trade Practices.

• Extent of damages.

• Redressal by statues and its effect on the quantum of tort suits filed.

• General conclusion.


To understand deceptive trade practices and tortuous liability we have to break down the tort and understand the concept of deceit. Deceit in general terms would be “to cheat”. But understanding the independent tort f deceit would give us the basement to understand deceptive trade practices. Deceit- historically the writ of deceit was available in narrowly defined circumstances involving abuse of process of the court. However, by the end 18th century , a more general tort of deceit had emerged in which liability was based on fraudulent misrepresentation had been made available to the claimant, inducing detrimental reliance. The making of representation which a party knows to be untrue and which is intended to induce another to act on the faith of it, so that he may incur damage, is a fraud.

The tort of deceit dates back to the case of Derry v. Peek[1] where Lord Herschell laid down “first in order to sustain an order of deceit there must be proof of fraud and nothing short of it would suffice. Secondly, fraud is proved when it is shown that false representation has been made 1) knowingly

2) without belief in its truth
3)recklessly, careless whether it’s true or false[2]

Fraud can be defined as
-Fraud is a subset of deceit and fraud must be proved for action of deceit -The defendant need not benefit from the fraudulent act.
- It is not fraud, if the defendant believes that the statement is true.

DECEPTIVE TRADE PRACTISES , as defined in THE MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT,1969 act means a trade practice which, for the purpose of promoting the scale, use or supply of any good or for the provision of any service, adopts any unfair methods or deceptive practices.[3]

Consumers protection act has listed out some of the deceptive trade practices[4]. - misrepresenting that the goods/services are of particular quality, quantity, grade, style or model.

- misrepresenting old, renovated, second hand, rebuilt goods as new ones. - misrepresenting that the goods/services has sponsorship, affiliation, approval, quality, style. -misrepresenting that the seller/supplier has sponsorship, affiliation, approval, which they do not have. - falsely gives to public any warranty or guarantee of performance, efficacy or length of life of a product that is not based on adequate test thereof.

Miscellaneous Deceptive Trade Practices

• Injurious Falsehood - can be defined as “a falsehood that tends to denigrate the goods or services of another, actionable at common law”[5]

• Slander of title or goods – nowadays, it is a generic term for disparagement of property movable or immovable, corporeal or incorporeal. Slander of title or good is a false or malicious statement about a person’s property or business. In Ratcliffe V. Evans[6], the defendant was held liable for publishing a false statement about plaintiff that the plaintiff has ceased to carry on his business and thereby causing loss of customers to plaintiff. Essentials of the Tort

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