Contents

• Consumer Protection and Restrictive trade practices

• Hire Purchase
• Leasing
• Electronic Commerce
6. Consumer Protection and Restrictive trade
practices
• The Consumer Affairs Authority (CAA) was established in April 2003
subsequent to the Consumer Affairs Authority Act No. 9 of 2003.
• The Authority commenced its operation in July 2003.
• This Act repealed the following three statutes.
o Consumer Protection Act No. 1 of 1979
o Fair Trading Commission Act No. 1 of 1987, and
o Control of Prices Act of No. 29 of 1950
6.1 Interpretations (Section 75)
“Consumer”
means any actual or potential user of any goods or services made
available for a consideration by any trader or manufacturer

"goods"
means any food, drink, pharmaceutical, fuel and all other merchandise
6.2 Consumer Rights and Responsibilities
• The right to satisfaction of basic needs
To have access to basic essential goods and services: adequate food, clothing,
shelter, health care, education, public utilities, water and sanitation.
• The right to safety
To be protected, production against products, processes and services which are
hazardous to health or life
• The right to be informed
To get information to make informed choice, and to be protected against
dishonest of mislead advertising and labeling
• The right to choose
To be able to select from a range of products and services, offered at
competitive prices with an assurance of satisfactory quality.
• The right to be heard
To have consumer interests represented in formulating and execution
of government policy, and in the development of products and
services
• The right to redress
To receive a fair settlement of just claims including compensation for
misrepresentation, substandard goods or unsatisfactory services
• The right to consumer education
To acquire knowledge and skills needed to make informed, confident
choices about goods and services, while being aware of basic
consumer rights and responsibilities and how to act on them
• The right to a healthy environment
To live and work in an environment which is non-threatening to the
well-being of present and future generations
 Powers of the Authority in regulation of
6.3
Trade
• CAA can intervene in to the market in order to curb the malpractices in the
marketplace and safeguard the consumers.
• Determine general and special directions relating to manufacture, import,
selling, storing, distribution of goods and services.
• Taking actions to assure the quality of the goods and services.
• Investigate or inquire in to product & services which does not confirm with
the standards or warranty.
• Authority can enter in to agreement with manufacturers or traders on
maximum price, standards, and specifications, any other conditions on
manufacture, import, supply, storage, distribution, transportation, marking,
labeling or sale of any goods.
• Determine & declare essential goods after the minister has decided it
is compulsory for day today life of consumer.
• Investigate or inquire into anti-competitive practices and abuse of
domain position.
• The authority may on a compliant or request made to it by any
person, any organization,of consumers or associations of traders carry
out an investigation with respect to the prevalence of any anti-
competitive practices.
6.4 Offences under the act
• Removing, altering, obliterating, erasing or defacing of a label or description
or price mark of any goods and producing such a good for sale.
• Violation of directions issued to manufacturers or traders in respect of
labeling, price marking, packetting relative to manufacturing, importing,
marketing, stoking, sale or manufacture of selling and stocking of goods or
on any other conditions.
• Sale or offer to sell any goods above the marked price.
• Failure to comply with the standards and specifications relating to goods and
services determined by the CAA.
• Manufacture or sale of any goods which does not conform to the warranty
or guarantee given by the manufacturer or trader.
• Contravenes any provision of any written agreement enter in to with the
Authority with any manufacturers or traders of goods provide for
maximum price, the standard of any goods manufactured or any condition
required on the manufacture.
• Refusing to sell goods in possession.
• Denial of goods in possession and imposing conditions on the consumer
upon purchase.
• Keeping the goods in custody excess of normal trading requirements.
• Increase the price of any specified good or service without the prior
written approval of the Authority.
• Fails or refuse to display the price list or price board in the place of
business.
• Not issue or refuse to issue a bill or receipt when demand by the purchaser.
• Engaged in a conduct that is misleading or deceptive the consumer by
trader or business.
• False representation that any goods or services are of a particular
standard, quality or grade, or that goods are of a particular style or
model, or that goods and services have sponsorship, approval,
performance characteristics, accessories ,users or benefits that they
do not have.
• Violation of conditions pledged in the warranty or guarantee by
implication or otherwise on the supply of goods and services.
• Prevailing anti-competitive behaviors or monopoly situations.
• Failure to maintain records as required by the Authority or to furnish
any information or to produce any documents to the Authority to
discharge its duty.
6.5 Directions issued under section 10
The Authority may, for the protection of the consumer
(a) issue general directions to manufacturers or traders in respect of
labelling, price marking, packeting, sale or manufacture of any goods; and
(b) issue special directions to any class of manufacturers or traders,
specifying
(i) the times during which and the places at which, such goods
may be sold; and
(ii) any other conditions as to the manufacturing importing,
marketing, storing, selling and stocking of any goods.
• http://www.caa.gov.lk/web/index.php?option=com_content&view=arti
cle&id=162&Itemid=672&lang=en
7. Hire Purchase
In Sri Lanka apart from the provisions of the Consumer Credit Act No.
29 of 1982 (as amended by Act No. 7 of 1990) which governs hire
purchase contracts, the Common law applicable is Roman- Dutch Law
and not English Law.
7.1 “Hire Purchase Agreement” (Section 31)
• Hire Purchase agreement means and agreement under which goods
are let on hire and under which
(a) the possession of goods is delivered by the owner thereof to a
person on condition that such person pays an agreed amount in
periodical installments; and
(b) (i) either the hirer has an option to purchase the goods in
accordance with the terms of the agreement; or
(ii) the property in the goods is to pass to the hirer on the payment
of the last of such installments.
“Hirer”
Hirer means the person
-who obtains or has obtained possession of goods from an owner
-under a hire-purchase agreement
-and includes a person to whom the hirer’s rights or liabilities under the
agreement has passed
-by assignment or operation of law.
“Owner”
Owner means the person
-letting, hiring or agreeing to sell goods
-under a hire-purchase agreement
-and includes a person to
-whom the owner’s property in the goods
-or any of the owner’s rights or liabilities under the agreement
has passed
-by assignment or operation of law.
7.2 Rights of the hirer
Section 7-Right of hirer to purchase at any time with rebate.
• 7(1)-Hirers right to purchase after giving owner 14 days notice in
writing of his intention, by paying HP price or balance as reduced by
the rebate calculated in manner provided in subsection (2).

Section 8-Right of hirer to terminate agreement at any time.

• 8 (1)- Right of termination before final payment due after giving 14
days notice in writing, redelivering/tendering the goods to the owner
and by paying the accrued due .
Section 9-Hirers right to appropriate payments in respect of two or
more agreements

Section 10- Assignment and transmission of hirer’s right or interest

under hire-purchase agreement.
• 10 (1)-Hirer can assign his right, title, interest and obligations under a
hire purchase agreement with the written consent of the owner and
all other parties.
8. Leasing
• A contract in which one party (lessor) permits to use the asset for a
specified period to another party (lessee) in exchange for periodic
payments for a specified time is known as Leasing.

• At regular intervals, the lessee pays a sum to the lessor which is

known as Lease Rents, as a consideration for using the asset owned
by the lessor.

• In Sri Lanka the leasing industry is regulated mainly under Finance

Leasing Act No. 56 of 2000 (as amended)
 Key Differences Between Hire Purchasing
8.1
and Leasing
• An arrangement to finance the use of the asset, in which one party
pays consideration to the other party in periodical instalments is
known as Hire Purchasing. Leasing is a business deal in which one
party buys the asset and grants the other party to use it, in return for
lease rentals.

• Down Payment is a must, in hire-purchasing but not in leasing.

• The duration of leasing is longer than the hire purchasing.

• Leasing may cover asset like land and building, plant, and machinery,
etc. Conversely, cars, trucks, tempos, vans, etc. are the kind of assets
which are sold on hire purchasing.

• The instalment paid in hire purchasing includes the principal amount

and interest. In contrast to Leasing, in which the lessee has to pay the
cost of using the asset only.

• In hire-purchasing, the ownership is transferred to the hirer only if he

pays all the outstanding instalments. On the other hand, in a finance
lease, the lessee gets the option to buy the asset at the end of the
term by paying a nominal amount, but in operating lease, there is no
such option available to the lessee.
9. E-Commerce
• "E-commerce" or "electronic commerce" is the trading of goods and
services on the internet
• E-commerce is one way people buy and sell things in retail.
• Some companies sell products online only, while other sellers use e-
commerce as a part of a broader strategy that includes physical stores
and other distribution channels.
• Either way, e-commerce allows startups, small businesses, and large
companies to sell products at scale and reach customers across the world.
• Electronic Transactions Act No. 19 of 2006 seeks to facilitate the
formation of contracts in cyberspace.
“Electronic signature” means –
- any letters, numbers, symbols, images, characters or any combination
thereof in electronic form
- applied to, incorporated in or logically associated with an electronic
document
- with the intention of authenticating and/or approving the same
- in order to establish authenticity or integrity, or both

Enforceable Electronic Signatures

• Agreements made by e-mails
• Entering a PIN into a bank ATM
• Signing credit/debit slips with a digital pen pad device at the point of sale
• Signing electronic documents online
Sec. 3 : Legal recognition of electronic records
• No data message, electronic document, electronic record or other
communication shall be denied legal recognition, effect, validity or
enforceability on the ground that it is in electronic form.

Sec. 4 : Requirement for writing

• Notwithstanding the fact that the provisions of written laws for the
time being in force in Sri Lanka attach legal validity to certain
instruments, only if such instruments have been reduced to writing,
such requirement shall be deemed to be satisfied by a data message,
electronic document, electronic record or other communication in
electronic form if the information contained therein is accessible so
as to be usable for subsequent reference.
Sec. 11 : Electronic Contracts
• In the context of contract formation, unless otherwise agreed by the
parties, an offer and the acceptance of an offer may be expressed in
electronic form. A contract shall not be denied legal validity or
enforceability on the sole ground that it is in electronic form.