Alleged Exclusion of Liability for Defective Goods and Unconscionable Conduct by Be Forward Japan Company Limited

On 4th December 2020, CFTC commenced investigations against Be Forward (Japan) Company Limited, for alleged exclusion of liability for defective goods and unconscionable conduct in carrying out trade in goods and services.

On 14th March, 2019, the Complainant purchased a Nissan March vehicle at MK1,102,934.04 (USD1,524). Upon delivery at Dar es Salaam, when the Complainant tried to drive the vehicle, he discovered that the vehicle could not respond when put in gear. A mechanic who was consulted to examine the vehicle advised that the vehicle transmission had some problems.

When the Complainant reported this to the Respondent, the Respondent was cooperative and advised the Complainant to source a replacement for the transmission assembly. However, later, the Respondent refused to provide replacement for the defective spare part, claiming that the Complainant had submitted the Complaint after the expiry of the warranty offered on the vehicle.

The Respondent instead offered the Complainant a discount of USD300 on the purchase of another vehicle; which the Complainant accepted.

In February 2020, the Complainant purchased another vehicle from the Respondent at a price of MK1,450,000 (USD2,000). The Complainant only paid MK1,162,900 (USD1,604) on the understanding that the USD300 discount will offset the balance.

The Respondent refused to deliver the Vehicle to the Complainant, and required the Complainant to pay the full price of the vehicle. The Respondent also charged the Complainant MK31,175 (USD43) for insufficient payment.

The Secretariat investigated the matter under Sections 43(1)(b) and 43(1)(g) of CFTA. The investigation established that the vehicle that the Respondent supplied to the Complainant had faulty transmission assembly. Initially the Respondent was willing to assist the Complainant by replacing the transmission assembly, but later retracted claiming that the warranty period had passed.

The Complainant submitted the Complaint in May 2019, and not in June 2019 which was still within the validity of the warranty (30 days).

The Respondent, therefore engaged in exclusion of liability for defective goods, which is in contravention of section 43(1)(b) of the CFTA.

The Respondent also failed to deliver the alternative remedy of the offered discount on the next purchase. Further, the penalty charge was unjustifiable towards the Complainant.

The conduct by the Respondent was thus unconscionable, which is in contravention of section 43(1)(g) of the CFTA.

The Commission resolved as follows:

  1. The Respondent should pay to the Complainant the equivalent amount of USD300 at the prevailing bank exchange rate, being the discount which was awarded on his next vehicle purchase but was not given.

2. The Respondent should refund the Complainant the equivalent amount of USD43 at the prevailing bank exchange rate, being the penalty effected for the alleged failure to remit full amount of money on the purchase of the second vehicle;

3. The Respondent should pay a fine of Five Hundred Thousand Malawi Kwacha (MK500,000) for engaging in exclusion of liability for defective goods and unconscionable conduct in the supply of goods and services.