Chapter 31

Legal Issues in Retailing

Learning Objectives:
To discuss the legal acts aimed at effective vendor Management To study the legal issues concerning customer relationship management To discuss the legal issues concerning store administration

To study the legal acts for managing store personnel

Laws in Retailing
In retailing, laws have been formulated to manage the following aspects of the business: Customers Vendors Store Personnel

Legal Issues and Vendor Management

Indian Contract Act, 1872 Prevention of Food Adulteration Act, 1954

Indian Contract Act, 1872

Prerequisites of a Contract:
The existence of an offer and its subsequent acceptance Free consent of both the parties Mutual and lawful consideration for agreement Competency of parties involved in a contract Certainty and possibility of performance

Indian Contract Act, 1872

Promisor: Person making the proposal

Promisee: Person accepting the proposal Consent: When both parties agree upon the same issues in the same sense Fraud: Any act committed by a party with the intent to deceive another party Surety: The person who gives the guarantee Principal Debtor: The person in respect of whose default the guarantee is given Creditor: The person to whom the guarantee is given Bailor: Person delivering the goods

Bailee: Person receiving the goods

Prevention of Food Adulteration Act, 1954

Objectives:
Protecting the public from poisonous or harmful food

To prevent the sale of substandard food

Protect the interests of consumers by eliminating fraudulent practices

Adulterated Food: Defining Parameters

Article sold by the vendor is not of the nature, substance or quality demanded by the purchaser Any inferior or cheaper substance is substituted wholly or in part for the article so as to affect the nature, quality or substance of the product Any constituent of the article has been wholly or in part extracted to affect the quality of the overall product An article has been prepared, packed or kept under unhygienic conditions because of which it has got contaminated or has become injurious to human health An article has been sourced from a diseased animal An article contains coloring matter which is not prescribed or the amount of coloring matter is beyond prescribed limits An article contains prohibitive preservative or contains permitted preservatives above prescribed limits An articles quality or purity falls below prescribed standards

Legal Issues and Customer Relationship

Consumer Protection Act, 1986

Consumer Protection Act, 1986

Rights enjoyed by Customers:
Right to be protected Right to be informed about quality, quantity, potency, purity, standard and price Right to choice Right to be heard Right to clean and healthy environment Right to consumer education Right to action against unfair trade practices

Legal Issues and Store Administration

Shops and Establishment Act

Shops and Establishment Act

Issues Covered:
Working hours per day and week
Guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays and overtime work Employment of children, young persons and women Rules for annual leave, maternity leave, sickness and casual leave Rules for employment and termination of service

Legal Issues and Managing Store Personnel

The Minimum Wages Act, 1948 The Payment of Wages Act, 1936 The Equal Remuneration Act, 1976 The Maternity Benefit Act, 1961

The Employees Provident Fund Act, 1952

The Employees State Insurance Act, 1948

Criteria for Availing Maternity Benefits

A woman should have worked for at least 80 days in the 12 months immediately preceding the date of her expected delivery A woman has to furnish a certificate 10 weeks before the date of expected delivery declaring that she is pregnant A woman has to offer in writing 7 weeks before the date of expected delivery stating the number of days she will be on leave before and after delivery The woman should receive payment of first six weeks before going on leave and next six weeks within 48 hours of producing proof of child birth

Employees State Insurance Act, 1948

Benefits of the Act:
Periodical payments to any insured person in case of his sickness certified by a duly appointed medical practitioner Periodical payments to an insured woman in case of confinement or miscarriage or sickness arising out of pregnancy, confinement, premature birth of child or miscarriage, such woman being certified to be eligible for such payments by an authority specified in this behalf by the regulations Periodical payments to an insured person suffering from disablement as a result of an employment injury sustained as an employee under this Act and certified to be eligible for such payments by an authority specified in this behalf by the regulations Periodical payments to such dependants of an insured person who dies as a result of an employment injury sustained as an employee under this Act, as are entitled to compensation under this Act