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With specific regard to the Fair Trading Act 186, contrary to many opinions retailers or suppliers have the right and power to decline sale of any particular good or service.To explain this belief this paper will firstly, outline the relevant law in regard to declining sale.Secondly, the general public belief that retailers cannot decline sale will be explained.Finally, this paper will use real life scenarios and relevant case law to explain why retailers or suppliers do in fact possess the power to decline sale.
Firstly, we must establish the relevant law in which the "right to refuse sale" arises.The Fair Trading Act currently stands as such
SECTION
No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
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SECTION 1
1(1) [Prohibition] No person shall, in trade, advertise for supply at a specified price goods or services which that person -
(a) Does not intend to offer for supply; or
(b) Does not have reasonable grounds for believing can be supplied by that person
At that price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
1() [Advertiser must offer] Any person who has advertised goods or services for supply at a specified price shall offer such goods or services for supply at that price for a period that is, and in quantities that are, reasonable having regard to the nature of the market in which the person carries on business and the nature of the advertisement.
Generally, the Fair Trading Act covers "misleading or deceptive conduct, and false representations in trade".Although, in our case Section 1 is specifically helpful in proving retailers or suppliers can in fact decide to decline sale.Section 1 can be broken into two specifically important aspects.Firstly, Section 1(1) states, "Can't advertise at a price a thing you don't intent to sell, or do not have reasonable grounds to believe it can be supplied".Secondly, Section 1() states, "If advertising a specific price, must have quantities reasonable enough, having regard to the nature of the market and nature of the advertisement".
A common perspective throughout the public is that, "suppliers or retailers should not be able to refuse consumers sale of any particular advertised good".The truth is that, retailers often do decline sale because they don't have the advertised good and quite possibly never intended to sell it.This situation often arises when a retailer uses"Bait advertising"."Bait advertising" is illegal and described as, "buying a different product from a particular trader whom you would have not have otherwise gone to if it weren't for a particular advertisement" and thus, the honest trader and ultimately the consumer losses.This process involves "Bait and switch"
ɨ Get the consumer into the store
ɨ Switch them to another product
Furthermore, Section (1) of the Act out lines other illegal excuses retailers sometimes use to decline sale.These include
ɨ "Is for sale, but not for you!" = No Breach
ɨ "Does not exist" = Breach
ɨ "Dose exist but not for sale" = Breach
Ultimately, using "bait advertising" or various other unethical techniques outlined above to decline sale, is "misleading and deceptive behavior".Therefor, a retailer or supplier can not decline sale, and if they do should be in breach of Section () of the Fair Trading Act.
At this stage it seems very difficult to understand how a retailer or supplier could ever legally decline sale.However, lets assume a couple of particular scenarios to establish a broader perspective.Firstly, let's suppose your business involved selling T-shirts at a local fair every Saturday.The business had a consistent client base on which you could accurately predict how much stock was needed.Secondly, lets suppose you decided to create a web site designed to supply the entire country with your T-shirts.Finally, let's say you were flooded with orders and couldn't supply all the necessary T-shirts.By this happening you would have changed the nature of the market and advertisement (S1 ()).Therefore, you as a trader should have foreseen this rapid increase in sales and predicted stock as necessary and therefore breaching Sectionand 1 of the Fair Trading Act.In the apparent scenario, this result seems unreasonable and nearly impossible to comply with.Thus, there are various ways around this and ultimately the right to decline sale.Firstly, exemption could involve, showing "stock levels" on the website itself, viewable to all possible consumers.This would inform the consumer that there is a possibility of the retailer being unable to supply the product and legally allow the retailer the right to decline sale.The stock level dose not have to be exact, an estimate is sufficient.For example, "be quick supplies limited".Secondly, a further exemption may include "running out of stock".However, this particular defence is usually attributed to produce goods (goods which are restocked regularly such as Fruit).Therefore, from this particular scenario we see that it is entirely possible for a retailer or supplier to legally decline sale.Furthermore, lets assume another scenario, suppose a minor or intoxicated person walked into your alcohol store or bar demanding to be served.If served, these persons could become sick, violent or even worse, you might be presented with a substantial fine.It is entirely unconventional and/or unethical to suggest suppliers should be forced to sell to anyone in either of these examples.Furthermore, the Sale of Liquor Act forbids such an act and deems it illegal.Therefore, again we see it is entirely possible for a retailer or supplier to decline sale. Overall, on closer analysis of realistic scenarios we discover that retailers and suppliers do in fact possess the right to decline sale.
To further emphasise our case, we can acknowledge an important precedent set in the case of Boots Chemist (176).The ratio set in Boots Chemist insinuates that an advertisement is only an "invitation to treat".This means that the customer makes the offer to purchase a good and the retailer of supplier hold the power to accept or decline the offer (similar to buying a house).
In conclusion, with specific regard to the Fair Trading Act, contrary to many opinions retailers or suppliers have the right and power to decline sale of any particular good or service.To explain this belief this paper has firstly, outline the relevant law in regard to declining sale.Secondly, the general public belief that retailers cannot decline sale has been thoroughly explained.Finally, this paper has used real life scenarios and relevant case law to explain why retailers or suppliers do in fact possess the power to decline sale.
Reference List
Fair Trading Act 186
Boots Chemist v Chemist Guild 176 NZ RD45
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