Private sector rejects Puerto Rico House bill to regulate contracts
SAN JUAN – Tuesday’s public hearing for Puerto Rico House Bill 295 was major setback after it was not endorsed by either the Puerto Rico Chamber of Commerce nor the United Retailers Association (CUD).
The measure, presented by Rep. Jorge Navarro Suárez before the Consumer Affairs, Banking and Insurance Committee, seeks to raise to the legislative rank the minimum parameters to regulate contractual relations between businesses and consumers in addition to regulating these contracts.
During the CofC’s presentation, its president, David Rodríguez, argued that the contracts are a business mechanism popularly used on the island and have a broad set of regulations.
“We use this mechanism to address such simple issues in our daily lives as selecting a telephone plan or fixing the washing machine, and other larger ones such as buying a house, for example. Therefore, having a reasonable, simple and fair regulatory system is essential for the proper progress of business relations in Puerto Rico,” Rodríguez, who is also a CPA, said.
Rodríguez added that the Consumer Affairs Department (DACO by its Spanish acronym) provides an additional level of consumer protection in terms of business relationships, so the consumer already has several levels of protection that can be used in the case of a contract that is illegal or abusive.
“In light of this, we find that the contractual norms lay on the consent of the parties and good faith permeates contractual relations in Puerto Rico. Such regulations provide specific requirements to determine the validity of a contract, while at the same time providing remedies accessible to the consumer,” he said while arguing that approval of the bill could create an environment of mistrust in contractual relationships that could have a negative impact on the economy.
Meanwhile, Jorge Argüelles, representing CUD President Nelson Ramírez, said that all small and midsize companies take offering quality service seriously and that the business environment is based on credibility and trust forged over time.
Argüelles argued it was “unreasonable” to seek to regulate this sector of the economy further, when DACO’s organic law covers everything concerning the requirements of businesses to fulfill their duty to customers.
“Adding another statute to the long list of consumer protections is detrimental to business people and the economic development of the country, especially now that we are bankrupt. We emphasize that our business sector is already extremely regulated, especially with regard to DACO standards,” he said.
The CUD representative assured it is essential to have regulations that establish responsibilities and guarantees that foster reliable business relationships; however, he said excessive regulations are highly detrimental to businesses in times of economic dire straits.
“As a business sector, we emphasize our relationship of trust and honesty with our customers, being reasonable enough to recognize when a clause is not balanced. We believe that the business relationship must be based on credibility and trust. Likewise, existing regulation must [be based] … promoting trust, security and protection of healthy commercial relations,” Argüelles refuted.