Each society with developed exchange business searched for and at the same time developed its legislature, which governed relations between the seller and buyer. Therefore, elements in connection with the consumer (buyer) protection may be found in public, statutory, legal or civil regulations and standards throughout the entire century. Event the ancient
The beginning of market supervision
Different approach of each king or ruler towards the legislature, law modification and towards each group participating on the market, such as the seller unions so-called – the guilds may be seen very clearly throughout the entire history. The relationship between the seller and buyer was considered as a local and individual and the status of both market participants was, in reality, a well-balanced status. The seller supplied a very small or limited area, most often limited by the city walls and had his own and loyal clientele, without which he would go out of business.
Each seller who wanted to sell his goods in the city had to present a metal badge, which he received from a clerk on the market, proving that he sold his goods legally, paid applicable fees and did not avoid supervision of the city office. However, cheating customers and rule breaking were common practices even in those days.
The sun goes down – the market is over
One of the oldest contracts is the market contract. However, in villages, the so-called exchange contract was a well-respected document for a long time. The applicable norms focused mostly on the real-estate sale. In times when real-estate titles or ownership did not exist, and real-estate ownership records in the land registry were done at the owner’s will, an interesting habit was accepted. Only the seller was responsible for defects of the real-estate property. That meant that no one has a better right towards the applicable real-estate. For example, the city law prohibited the sale of real-estates after sundown. When non-real estate property or moveable property was sold, the owner had to guarantee that he is not selling a stolen item. According to the old law, if the seller sold stolen item, he was considered as accomplice in the theft. No one was responsible for physical damages at that time. Responsibility for damages of sold goods was partially included in the city law and was only applied during a sale of a horse. The seller was obligated to tell the buyer whether the horse suffers from heavy breathing or if he is somewhat hurt. If, within three days from the sale, the buyer discovered one of the two defects, he had the right to ask the seller to return his money back.
Also standards and norms were used on our territory. These standards described the relations between the seller and buyer, for example, “Práva městská Království českého“ (The City Rights of the
The unified city law guaranteed unified interpretation of the law, unified juridical application by courts and provided the seller and buyer with equal guaranty that their obligations will be evaluated and judged equally and uniformly in different cities. This law was observed and still valid and accepted in the 18th century. Its major part was void in 1811, when the General book of laws was published.
Bailiffs and aldermen – the first inspectors
At the very beginning, the supervision of dishonest and insincere sellers was done by the cities. The city bailiffs or aldermen were often busy with crooks. Within the scope of the city police authority, aldermen (usually twelve of them) published market orders and regulations in order to protect the buyers and sellers. They established prices for certain goods to protect the public from high prices and oversaw traders and craftsmen. They also tried to eliminate cheating in pubs. Starting in 1390, each pub had to have an "official tankard" with a nail, representing the correct amount/level, where every customer could check whether his tankard is full or "half-full". If aldermen discovered that the "official tankard or cup" does not comply with their own testing tankard, they drilled a hole in it and the pub owner was fined. The busiest and most frequent business took place at the marketplace. Here, various unfair business practises happened every day. So-called weekly markets begun with bell tolling and by banner or flag display. Or similar signs were used. If the banner was still on the pole, business could go on. Wholesalers however, could start purchasing only if the banner went down (only after common buyers completed their shopping), because they were viewed as the reason for price increase. The largest markets were the anniversary markets. So-called the market fairs. Usually one market fair was held during the spring time and the other one during autumn.
A cheater shall be beheaded
To prove to you that cheating of customers has a long “tradition”, read the following record from 1525, when a butter added with tallow was discovered at one of Prague´s markets. Sellers added bread crumbs into crushed pepper, peas into wax and lime into salt. Fishermen “decorated” dead salmon with blood of other fish to achieve the look of a freshly caught fish.
To ensure that high-quality goods were sold on the market, the supervision was often done by masters of certain crafts who examined the sold goods and confiscated bad goods immediately. Selected alderman inspected the correctness of measuring and weighting instruments. But because different states used different measuring units and even in one city you could find different measurement units, as cubit - a measuring unit was not always the same, it was rather difficult job. They used the city policemen, guards, the bailiff and the city clerk to help them out during these inspections. During the old days, the bailiff had the right to arrest swindlers and whoever disobeyed his orders was sentenced for beheading. In the 16th century, beheading was replaced by less severe punishment. The swindler got his hand cut off.
Sinners were judged by the aldermen. Small offences could have been solved by the bailiff. Who was unhappy with the judgment could file an appeal - first with the aldermen of other cities (e.g.
Filling an appeal was not a cheap decision. In a book written by Karel Štorkán, describing the activities of the Old-town executioner and medical doctor Mr. Jan Mydlář, we may see how the inspections and punishments of dishonest sellers were done before the end of 16th century. These events are depicted as follows: “His majesty, the emperor Rudolf was not happy to see sellers and other businessmen cheating citizens by alternating the weight of goods or lowering the quality of flour or bread in a desperate attempts to get rich quickly. Suddenly, there was a work for aldermen and for the Old-town executioner and police guards. Aldermen walked the city streets, visited the market place and checked the sellers. Incorrect weights or shortened measuring apparatuses were loaded on a trolley and to enhance the disgrace of the cheater, they were buried underneath the gallows drop. Furthermore, the executioner had to carry out his duties and fulfil the applicable sentence. Besides monetary fines, dishonest cheaters were in put a metal basket and submerged into the ice-cold
Guilds and rulers
At the beginning of the existence of city legislature, the bailiff and aldermen were ordered to inspect the manufacturing and crafting processes and to issue necessary regulations. Slowly appearing guilds took over these duties. Besides other rights, the masters of the applicable guilds had the right to oversee the work quality of master craftsmen. The oldest record describing the establishment of a guild dates back to 1318 (the guild of tailors) and 1324 (the guild of goldsmiths). The establishment of guilds may also be understood as an attempt of master craftsmen – the old-time inhabitants to unite craft, as well as protect themselves against unwanted competition. The cities welcomed the unification of crafts, because it helped them to perform inspections and tax collections easier. The sale of each type of goods or services were regulated by guilds rules. Guilds, throughout their existence, went through several turn point periods. From absolute and unlimited freedom to their involuntary and forced termination. During the ruling of Charles IV, an important encounter between the ruler and the guilds occurred. Charles IV was aware about the rising influence of city crafts on the city policies but he also realized the danger that could arise if crafts were monopolized. Monopolization would eliminate competition, lowered the quality of goods and would also put an end to competitive pricing policies.
Lastly, a plague epidemic that swiped through
After strict measures against the guilds were applied throughout the forties and fifties of the 14th century a new turn happened. Unification of craftsmen into guilds was not protected anymore and at the beginning of the 15th century guilds were almost terminated. The master of the guild and the older master were managing the technical supervision, as well as the inspection of the applicable craft. The published guild regulations described and governed the process of raw material purchasing, the production quota, as well as the volume of goods sold on the market by one master. It also included regulations relevant to employment issues.
Additional intervention into the guild management happened in 1547, when Ferdinand I, completely terminated the guilds. This was a punishment for a rebellion, where
In
Trading and licensing order
The total termination of the guilds system happened in 1859, when occupational licensing and crafts were declared to be free. Whoever bought commercial or occupational license could practice the applicable craft. However, the craftsmen organization was not terminated. The trading and licensing order issued by the Emperor's patent in 1859 (Rule No. 227/1859), included, besides other things, also regulations relevant to the establishment of unions or corporations, as well as applicable certificates and organizational structure. The purpose of corporation was, quote: “to develop mutually beneficial spirit, to improve and maintain the good name of the institution, as well as to support humanitarian, economic and educational interests of its members and followers “.
For example, the humanitarian interest was represented by the intent to create so-called health treasuries and other health supporting funds and the economy interests was represented by improvement of manufacturing methods, establishment of warehouses, marketplaces, etc. These communities or associations issued regulations described by the apprentice education process. They managed disputes arising from work or education processes, as well as disputes between their own members. If applicable regulations were violated, they could also impose punishments - penalties or fines. In 1891, the city of
Market supervision and consumer protection in the modern era
The supervisory law and the market police
The Trading and Licensing Order, which took legal effect in January 1860 was published during the ruling of Frantisek Josef I. It described the basic responsibilities and rights of persons who did business or performed business activities under a commercial license. For example, it included responsibilities and regulations relevant to workshop markings, product pricing, as well as hygiene regulations. The supervision was performed by the Trade Licensing Office, which also had the authority to apply the “supervisory law”.
The Trade Licensing Office could also impose fines and penalties and had several enforcement available. Tools such as right to confiscate goods, right to stop operation of machines, or the right to close the applicable workshop completely. Violations against the Trading and Licensing Order were punished by warning, penalty, fine or by imprisonment of up to three months, be removing the right to keep apprentices or helpers, or by revocation of the applicable commercial licence. These standards and regulations also contained terms such as the market or commercial police.
The Trading and Licensing Order used during times of the Austro-Hungarian Empire was adopted by the Czechoslovakian state in 1918 as valid, but with certain modifications. However, it was cancelled on December 31, 1965. Anyone who felt that he/she suffered damages due to an illegal decision or that his/her rights were violated could file an appeal pursuant to Rule No. 36/1876 Coll., before the
Also the criminal law (No. 117/1852 Coll., the Criminal Law describing criminal activities and violations) remembered that consumers may be abused and that incorrect measuring instruments may be used. Such activities were considered as fraudulent and therefore criminal in nature. Disobedience or disrespecting of issued tariffs and tax laws, relevant to some commodities, or incorrect pricing, or claiming incorrect product properties was considered as misdemeanour. Third offence was punished by license revocation.
Changes in the Civil Code
The General Civil Code ensured the proper status of buyers. Its first issue was published in January 11, 1786. The final shape of the Civil Code was announced on July 1, 1811. However, the codification of the Civil Code had already begun in the first half of the 18th century, when the assembled compilation committee presented its work (six books) before the Empress Marie Theresa in 1766. The Code was found as impractical and was returned by the Empress back for modifications.
The important development in the codification process occurred after Joseph II took over, when the above-mentioned General Civil Code was published. It was based on Roman laws, city laws and remained valid on our territory, with small modifications, until 1950. This collection of regulations was an extensive script, as it contained 1502 rules. Besides other issues, it also included regulations specifying the creation and duration of exchange contracts, market contracts or damage reimbursement policy.
In-house trading and other illegal activities
To further improve the consumer protection policy, additional conditions relevant to the sale of commodities and to service administration were established. For example, the so-called draft glass law, that had to be obeyed in pubs since 1875, the food trading law issued in 1897, the wine trading law issued in 1907 or the collection of regulations describing the production and circulation of foods (Codices), which were replaced by the state or company regulations and norms in 1948.
We would like to also mention the Rule No. 252/1852 Coll. The in-house trading law, Rule No. 26/1895 Coll., describing the closeout sale policies, directive No. 25/1918 Coll., describing the buyer/consumer protection from fraudulent practices relevant to goods quality and to the manufacturing process, or Rule No. 111/1927 Coll., describing unfair business practices. Already at the beginning of the last century, an unfair business practice was considered, for example, fraudulent advertisements, incorrect marketing of the origin or incorrect use of the company trademarks.
Also, during the development process of industrial products, technical units were integrated in the Legislature and therefore, in 19th century, we may already see norms and modifications describing testing and certification process of some products - steam boilers for example (issued in 1871 and remained valid until 1952) or law specifying the use of firearms (1891).
Market and consumer protection policies after 1948
The consumer protection regulations were described, for example, by the Rule No. 160/1949 Coll., the inner trading policy (cancelled during the eighties), which enabled the Ministry of the Inner trade to issue regulations that helped to ensure goods distribution and to control the goods circulation, the demand, etc. These regulations, for example, specified how to determine hours when a particular store should be open, regulations relevant to supplies and purchasing of each type of goods, net weighting methods, the technical process of goods weighing, glass bottle buyback policies, etc. Some hygiene regulations were published in the 1944, such as regulations describing the cleanness of beer drafting equipment, food storage regulations, regulations relevant to barber and hair saloons, etc. We also like to mention the directive of the Ministry of Inner Trade No.
13/1968 Coll., which ordered sellers to mark their branches appropriately and it governed the issuance of sales permits to citizens.
The civil protection was ensured and included in the Civil Code (first Rule No. 141/1950 Coll., and later the Rule No. 40/1964 Coll., which is valid and used with certain modifications even today). Inspection activities in the retail section and in public meal halls or cafeterias have been done in accordance with government Rule No. 21/1953 Coll., describing regulations relevant inspection activities performed by citizens, also called the citizen inspectors, who were appointed and managed by the City offices or by the ROH unions (later substituted by government directive No. 59/1959 Coll., which remained valid until 1967). These inspectors had the right to request an immediate corrections if they found out shortcomings or deficiencies in the workshop. If they were unsuccessful or if they evaluated the breach as repeated violations of rules, they had to inform the city office or the applicable trading inspection office.
State Trade Inspection
Pursuant to government directive No. 98/1952 Coll., from December 2, 1952, the State Trade Inspection was established as a part of the Ministry of Inner Trade. The head of the STI was the Trade Inspector, who managed and governed county inspectors (they were appointed and recalled based on the proposal of the main inspector and by the Ministry of Inner Trade). The State Trade Inspection was authorized to inspect the following:
a) correctness of goods sales to consumers and whether net weight and measurements were observed;
b) whether prescribed retail prices were observed, as well as additional charges or surcharges applied in stores;
c) whether mandatory reserves and goods assortment quotas were available;
d) fullfilment of prearranged norms, relevant to the assortment and compilation of foods and meals, served in public pubs and cafeterias;
e) whether sufficient amount of coins was available in the cash register and whether the cash register clerk was giving the proper amount of cash back to customer;
f) whether hygiene and safety regulations appropriate for public establishments were observed;
g) inspection of weighting and measuring instruments, mainly if they were properly tested; to make sure that public stores used the proper weighing equipment and that they had the appropriate set of weights available;
h) whether regulations describing the transportation, storage and goods protection were observed, as well as making sure that trading establishments had the necessary inventory and equipment available; the proper use of the inventory and the equipment;
ch) whether regulations describing the goods circulation on the market were observed, as well as the method of the goods sale.
Responsibilities of the state inspection office are specified below:
a) to make sure that theft, dishonest activities, embezzlement, frauds, goods devaluation and deterioration and destruction of property belonging to trading establishments could be discovered in time;
b) to inspect whether complaints are processed and investigated correctly, as well as notifications from buyers pointing out shortcomings or deficiencies in services or in the work methods used by applicable sale networks, or in public establishments that served foods and meals, and to inspect corrective measures applied by the management of the applicable store or trading establishment.
If inspectors discovered violation, they had the right to penalize or fine the managers of the establishment or a pub, or they could pass these findings over to investigation authorities for further processing. This regulation remained valid for 10 years (it took legal effect on December 30, 1952 and remained valid until December 28, 1962).
Pursuant to government directive No. 76/1958 Coll., the State inspection office has been established. This office supervised and oversaw the quality of foods and agricultural products. This supervisory body inspected the quality and storage of food products and raw materials used to manufacture food products, as well as the quality and storage of agricultural products. This institution was subject to the Ministry of the Agricultural Industry and Purchasing of Agricultural Products.
Three state inspections
In 1962 , pursuant to the directive No. 98/1952 Coll. and No. 76/1958 Coll., the inspection has been terminated and replaced by Rule No. 122/1962 Coll., the State agricultural, food and trade inspection law. This law determined the three state inspections and established their duties. These were: the State inspection overseeing the quality of agricultural products, under the Central Administration for Agricultural Product Purchasing , the State inspection overseeing the quality of food products, under the Ministry of Food Industry and the State trade inspection under the Ministry of Inner Trade. Each Inspection office included central inspectorates who governed their subordinate inspectorates, located in different counties. The head of the inspection was the director, who was appointed and recalled by the manager of the applicable body. The division of competencies is clear from their names. As far as the State trade inspection is concerned, its competencies were determined as follows:
“ The State trade inspection controls whether regulations and rules in connection with inner trading activities are followed. Activities such as correctness of goods selling and purchasing, whether valid prices and material norms used during the production of food and drink products are followed, whether hygiene, sanitation, storage, transportation and packaging rules are observed and finally, whether scales and measuring instruments, as well as other relevant instruments used in stores are accurate. It also inspects whether high-quality goods are accepted and whether the amounts of the accepted goods comply with the applicable regulations “.
In the interest of our consumers…
An amendment from 1968 (Rule No. 31/1968 Coll.,) gave authority to the County city offices to order the applicable inspectorates of the State trade inspection to perform tasks in order to protect consumer interests. These were:
- to inspect retail prices, business activities, quality of sold goods, regulations for kiosk sale, market place sales, citizen selling activities, regulations relevant to classification of facilities providing accommodation and public meals, material norms regarding food and drink production (including employee, school and nursing houses meal serving halls and cafeterias), hygiene and sanitation rules, correctness of weighting and measuring equipment and other instruments used in stores, goods supply and transportation regulations - during consumer demand monitoring process.
When inspectors discovered violation of regulations, they could impose fines or penalties in accordance with regulations valid at that time (directive No. 61/1961 Coll., describing fine and penalty management, valid until 1990, enabled inspectors to fine and collect penalty payments of up to CZK 100,-) or impose cash fines up to CZK 2,000,- if approved by the county trading inspector. Further, employees of the state inspection offices could prohibit purchase, sale, supply or use of defective or low-quality products or raw materials and the use of incorrect weighting or measuring instruments, if such instruments did not comply with valid requirements. County directors could also give warnings or public warnings to employees of the inspected organization, or they could recommend transfer of the disobedient employee to a different work/position.
The Czech Trade Inspectorate
In 1986, individual law have been accepted: the law No. 63/1986 Coll., the Czech agricultural and food product inspection and the Rule No. 64/1986 Coll., the Czech trading inspection law, which remains valid until now. The Czech trading law (further the CTL only) has been modified many times and its current form includes directly or indirectly 10 legal regulations. Its original form, published in 1986 influenced the competencies of the CTI:
“The Czech Trade Inspectorate oversees and inspects organizations performing business activities and citizens selling goods on inner markets
a) inspection of regulations of unified social policy,
b) inspection of preset goods assortment and store supply, level of service provided by employees, inventories relevant to the quality and amounts of accepted goods and whether goods comply with quality requirements, as well as with health standards, inspection of manufacturing norms regarding the preparation of foods and drinks, storage and transportation conditions, personal hygiene requirements and whether manufacturing or storage processes comply with the applicable hygiene standards,
c) whether goods are sold in correct amounts, weight, quality and sizes and for valid prices, as required by legal regulations, technical norms or by other binding rules,
d) whether organisations purchase goods from citizens in the correct way,
e) whether uncertified and unverified measuring instruments are used or whether instruments that do not comply with state or technical norms are used,
f) whether other regulations and commonly accepted legal rules are observed as required by mandatory and binding requirements, necessary for the operation of retail and wholesale businesses. Whether establishments providing business services, public meals, accommodation services and travel services (travel agencies) and goods selling services are observed.
The Czech Trade Inspection oversees and inspects organizations that manufacture products or provide services in order to satisfy needs of the inner markets and citizens. It also inspects whether regulations relevant to quality and assortment of goods destined for storage or shipping are complied with.
Growth of inspection authority
In its original form, the CTI law, for example, talked about county CTI inspectorates and the amounts of monetary fines was limited by CZK 200,-. It also enabled the director of the county inspectorate to punish the employee who violated the applicable regulations by issuing a warning or fine in the amount between CZK 5,000,- 50,000,- for quality-related violations or for failure to comply with storage or shipping /transportation regulations, etc. County city offices had the right to order the county inspectorates to perform inspection to determine whether regulations are followed. That applies to these following regulations:
a) performance of business activities, mainly inspection of retail prices, quality, health standards, health requirements and operational hygiene requirements,
b) kiosk or booth sale, market sale and market fair sale and customer/retail sales,
c) regulations describing the classification process of restaurants and establishments offering accommodation services and how they are placed in the applicable pricing class or standard class.
CTI was authorized, within its authority, which was agreed and determined by the Ministry of the Trade of the Czech Socialist Republic and by applicable central governing bodies, to inspect and control the following; sale of pharmaceuticals and medical goods used by health organizations or by health organizations belonging to the unified health system, sale of periodicals performed by organizations or distribution networks and business activities of organizations governed by the Ministry of Culture of the Czech Republic. As determined in the agreement between the Ministry of Trade of the
Consumer Protection Law
An amendment of the CTI law, issued in 1992, terminated provisions relevant to county city offices. Terms such as “warning“ and “county“ were left out and the amount of fines began to be based on the minimum salary regulations (100 times the minimum salary of the individual person who violated the applicable rule and 5 times the minimum salary of the inspected body/person). The upper limit for monetary fines and fines payable in cash was raised to CZK 2,000,-.
The most important legal act regarding consumer protection policy, was the acceptance of law No. 634/1992 Coll., the Consumer protection law. Its current form includes 15 successive legal modifications so far. Thanks to everyday efforts of all CTI employees, this form is getting slowly but surely into minds of our citizens and consumers.
Produced by: Ing. Kateřina Hájková
Literature:
„České právo v minulosti“ (Czech law in the past), Karel Malý, 1995
„Dějiny českého a československého práva do roku 1945“(The history of the Czechoslovak law until 1945) , Karel Malý a kol., 1997
„Pražské cechy“,(Guilds of
„O ochraně spotřebitele“(Consumer protection), M. Zdražil, 2000
„Zlatá doba měst českých“ (The golden times of Czech cities), Z. Winter – 1913, published in 1991
právní předpisy (legal regulations) – ASPI