Dash's Designer, a local chain of discount men's clothing stores, has agreed to stop advertising that merchandise is on sale unless the sale price of the merchandise represents a "meaningful reduction from its regular selling price."

In a settlement with the Montgomery County Office of Consumer Affairs, the firm also agreed to maintain adequate records showing the basis for claims of savings.

The chain, which has five stores in the Washington area, will pay $1,500 to Montgomery County's general fund, according to the terms of the settlement. Dash's signed the agreement without admitting to any violations of the law.

Mercy Dashtara, the secretary of Danik Inc., the corporate owner of Dash's, said the company agreed to sign the settlement to avoid the cost and the time involved in fighting a court case. "We feel we haven't done anything wrong; we never intended to lead anyone on . . . we had no idea we were breaking any laws," Dashtara said.

Barbara B. Gregg, executive director of the consumer office, said her agency began to monitor Dash's ads in February after receiving a consumer complaint about their sale practices. Investigator Susan A. Cohen said she found a pattern of ads in which the same item was offered repeatedly for the same price--even though the item was being treated in the ad as if it had been marked down from a higher regular price.