Restrictive and Unfair Trade Practices — MCQs

All questions with answers and explanations

Read the full set here, or use the practice card above to test yourself one question at a time.

1. 'Unfair trade practice' under Section 2(47) primarily targets

   • Physical defects in manufactured goods
   • Deceptive or unfair methods used to promote the sale, use, or supply of goods or services (correct answer)
   • Delay in delivery caused by natural disasters
   • Government price-fixing regulations

   Explanation. Unfair trade practice targets deceptive or unfair methods used to promote sale/use/supply, such as false representations and false guarantees.

2. Which of the following is expressly listed as an unfair trade practice under the 2019 Act?

   • Charging the market rate for goods
   • Disclosing to another person personal information given in confidence by the consumer, unless the law permits the disclosure (correct answer)
   • Offering a genuine discount on goods
   • Advertising truthfully about a product's features

   Explanation. Section 2(47)(ix) lists disclosing personal information given in confidence by the consumer, unless the disclosure is made in accordance with law.

3. 'Restrictive trade practice' under Section 2(41) primarily targets

   • False advertising about a product's quality
   • Conduct that manipulates price, delivery conditions, or supply flow, imposing unjustified cost or restriction on consumers (correct answer)
   • Negligent performance of a professional service
   • Manufacturing defects in electronic goods

   Explanation. Restrictive trade practice centres on distorting the market's ordinary functioning (price, delivery, supply), harming consumers collectively.

4. What is a 'tie-in arrangement'?

   • A warranty that ties the manufacturer to a fixed repair cost
   • A trade practice requiring a consumer to buy or hire one good/service as a condition of buying or hiring another (correct answer)
   • An agreement between two consumers to share a purchase
   • A government scheme linking subsidies to income level

   Explanation. A tie-in arrangement conditions the purchase of one good/service on also purchasing another, and is expressly included as a restrictive trade practice.

5. Which of the following delays in supply is expressly treated as a restrictive trade practice?

   • Any delay caused by a genuine, unavoidable transport strike
   • Delay without sufficient cause that gives rise to a rise in the price of goods or a service (correct answer)
   • A delay of less than 24 hours
   • Delay caused entirely by the consumer's own request

   Explanation. The Act expressly includes, as a restrictive trade practice, delaying supply without sufficient cause so as to give rise to a price increase.

6. How can a single set of facts be relevant to both 'unfair trade practice' and 'restrictive trade practice'?

   • It cannot — a transaction can only ever involve one of these wrongs
   • A retailer could both falsely claim a warranty is legally mandatory (unfair) and force a tie-in purchase (restrictive) in the same transaction (correct answer)
   • Only government transactions can involve both
   • Unfair and restrictive trade practices are legally identical terms

   Explanation. A single transaction can give rise to more than one statutory wrong — e.g., a false claim (unfair trade practice) alongside a tie-in arrangement (restrictive trade practice).

7. What is the key difference between 'unfair trade practice' and 'restrictive trade practice'?

   • There is no difference; they are interchangeable terms
   • Unfair trade practice centres on deceiving the individual consumer; restrictive trade practice centres on distorting the market's ordinary functioning (correct answer)
   • Unfair trade practice applies only to services; restrictive trade practice applies only to goods
   • Restrictive trade practice can only be committed by the government

   Explanation. Unfair trade practice is about deception directed at the consumer's decision-making; restrictive trade practice is about market-level manipulation of price, supply, or delivery.

8. Advertising a product with an artificially inflated 'original price' next to a discounted price, to create a false impression of savings, is an example of

   • A defect in goods
   • An unfair trade practice (correct answer)
   • A deficiency in service
   • A valid marketing strategy with no legal consequence

   Explanation. Materially misleading the public about the ordinary selling price of goods, to create a false impression of a discount, is a recognised unfair trade practice.

9. Besides a consumer's own complaint before a Commission, which body has an independent, suo motu power to act against unfair and restrictive trade practices?

   • The Reserve Bank of India
   • The Central Consumer Protection Authority (CCPA) (correct answer)
   • The local municipal corporation
   • The State Legislature

   Explanation. The CCPA can investigate and act suo motu against unfair and restrictive trade practices, without waiting for an individual consumer complaint.

10. A retailer refuses to sell a popular phone unless the customer also buys an unwanted extended warranty and accessories from the same retailer. What is this an example of?

    • A defect in the phone
    • A tie-in arrangement, a form of restrictive trade practice (correct answer)
    • A deficiency in service
    • A valid exercise of the retailer's business discretion with no legal consequence

    Explanation. Conditioning the sale of a wanted product on purchasing an unwanted one is the classic tie-in arrangement, a form of restrictive trade practice.