1

For example, in Sim Lim cases, customers are tricked into signing a contract where they won't get their phones.

https://en.wikipedia.org/wiki/Sim_Lim_Square

However, what the shop did is technically legal. I mean the customer sign a contract.

Technically, every time I offer people to download an e-book, for example, I can put terms that people agree to be my slave somewhere on the contract or pay me $1 million dollar. Not that it'll be enforceable in court, or is it?

Technically insurance agents can say that the whole money is invested. Somewhere deep in the contract there could be a term saying that there is a fee of 100% of all money put, for example. The last one is pretty real and happen a lot.

Another sample could be Trump's university. Most of people there is unhappy with the money.

So it's not technically a fraud. It's legal. Just like time share sells.

But it's not normal win win trade either.

So what is it?

Scam?

6

There are three answers here.

First, as is common on this site, you are using the term, "legal" and "illegal." Those are not legally meaningfully terms. A good lawyer won't use those terms to mean allowed or disallowed. We talk in terms of potential civil or criminal liability, or other sanctions and consequences. To say that something is "legal" does not communicate much.

Second, all contracts are governed by a duty of good faith. That means that you cannot try to "trick" someone with the terms of the contract and expect to enforce that contract against them and you cannot try to skirt your obligations by finding a tricky form of compliance not within the mutual understanding of the agreement. As with all things, defining good faith is not easy, and depends on the specific context of a situation. It is worth distinguishing between the duty of good faith, and the duties one owes to a fiduciary; good faith is surely far less, but nevertheless still meaningful.

Third, a defense to non-performance of a contract is that the agreement as written is unconscionable. A contract that is a grossly unfair deal where the contract was not actively negotiated (i.e. Blindly signing a bad form contract), may fall under this category.

Note: I am not your lawyer; this is not legal advice; contact a licensed attorney in your area; do not rely on my statements; I merely am providing a general answer that is academic in nature.

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  • 1
    A contract for something illegal is not unenforceable because it is unconscionable. It is unenforceable because it lacks legality of objects. – Dale M Sep 2 '16 at 21:15
  • I don't agree. But it's fine doesn't change the answer radically, I'll reword to avoid dispute. – COMisHARD Sep 2 '16 at 22:19
2

I would dispute your assertion that these sorts of practices are "technically legal", although it varies from jurisdiction to jurisdiction and I can't speak for Singapore.

In most countries, the relationship between a trader and customer is regulated by consumer protection law, which cannot be overridden by signing a contract. For instance, EU countries each implement the Unfair Commercial Practices Directive (2005) (See Wikipedia or the full text). Article 6 states that

A commercial practice shall be regarded as misleading if it contains false information and is therefore untruthful or in any way, including overall presentation, deceives or is likely to deceive the average consumer, even if the information is factually correct... and in either case causes or is likely to cause him to take a transactional decision that he would not have taken otherwise[.]

(Emphasis mine.)

I think this would cover most of the situations you're talking about.

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  • In Indonesia, insurance agent can claim that all money is invested even though 100% of money is gone for fees. The fee is well hidden in the contract and is about 500 times more expensive than regular premium for comparable insurance. – user4951 Sep 2 '16 at 11:27
  • That's EU. Indonesian lawyer says that it's not fraud. Even deceptive marketing is not fraud. I mean people don't go to jail just for doing deceptive marketing. So I guess the term is like that. Deceptive marketing. – user4951 Sep 2 '16 at 11:28

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