PDA

View Full Version : Legal Question - Can they refuse to sell to you?


DanBlather
01-18-2005, 01:35 AM
Some friends are establishing a retail store. One of the suppliers will not sell to them because they think they are too close to other stores carrying the same product. Is this legal? This is in Oregon if that makes a difference.

SavageNarce
01-18-2005, 08:11 AM
It may be. Some products have "authorized vendors" who are allowed to resell a product with an exclusive license for a certain area. If that is the case, the manufacturer can refuse to sell to another store in the same area, as this would violate their contract with the already-established authorized reseller.

Colophon
01-18-2005, 09:27 AM
IANAL but as far as I know, nobody is obliged to sell anything to anybody. The suppliers own the goods, so it's up to them who they sell them to (race/sex discrimination laws permitting, I presume).

I am often amazed by the number of people who seem to think they have a god-given right to buy things, e.g. "That shop wouldn't accept a 50 note - but that's legal tender so they must be breaking the law", or "The price tag said 3.99 instead of 399, so they have to sell it at the lower price". If the shop/wholesaler owns the goods, they call the shots.

Rex Fenestrarum
01-18-2005, 09:44 AM
What he said ^^^. No store is ever obliged to sell anyone anything at any time. Now, if the people than ran a store said "we won't sell this to you because you're black" or "we won't sell this to you because you're a woman" then you might have an equal rights case. But even if that's the true reason and they cloak it in any other reasonable excuse, they're covered (unless a pattern becomes obvious, in which case a class action might be filed).

But honestly... No store is required to sell anything to anybody. And they can take whatever form of payment they want too - $10 bills only, no checks, Visa but not Discover, etc.

Telemark
01-18-2005, 09:58 AM
The question here is not about stores selling to customers, but suppliers selling to stores, correct? If so, then yes there are lots of valid and legal reasons why a supplier might not want to sell to a particular store.

Besides the exclusive territory mentioned above, there are marketing and pricing strategies that might cause them to favor one store over another, or perhaps they just want to deal with large stores to cut down on paperwork and be a more efficient operation. But the basic point would be that they suppliers are not obligated to sell to any particular store

DanBlather
01-18-2005, 11:53 AM
The question here is not about stores selling to customers, but suppliers selling to stores, correct? If so, then yes there are lots of valid and legal reasons why a supplier might not want to sell to a particular store.

Besides the exclusive territory mentioned above, there are marketing and pricing strategies that might cause them to favor one store over another, or perhaps they just want to deal with large stores to cut down on paperwork and be a more efficient operation. But the basic point would be that they suppliers are not obligated to sell to any particular storeYes, this is the case of a supplier selling to a shop. Somewhere, deep in the back of my mind, I seem to recall that a supplier/manufacturer could set criteria for who they would sell to; e.g., must buy this much, have a store with a particular amount of sq ft, be able to provide support, etc. But if a store met that criteria, then they were obligated to supply them. That may have been a particular state.

This falls under the general concept of anti-trust. After doing some more research on the net I have found that it is illegal for suppliers to require "tie-ins"; e.g., I will only sell you our cosmetic line if you also agree to buy our electric eyebrow tweezers. The theory here, is that you are restraining trade by freezing out other manufacturers of eyebrow tweezers.

I have not seen anything that addresses my particular case.

mazinger_z
01-18-2005, 12:16 PM
IANYL, this is not legal advice, we do not have an attorney-client relationship, all other disclaimers apply...

The antitrust issue is the most common one to arise out of your scenario. However, the facts that you presented do not appear to be an issue, but arguably, you need more facts. Consider franchise law: McDonald's isn't going to sell you their fries and their shake mix, if you're not a McDonald's, or even a restaurant, are they? And, as other have stated before, no one has to sell your friends anything, in general. Also, it is not uncommon for parties to establish exclusive pricing or supply to a particular store.

Depending on the facts, however, there may be other unfair restraints on trade. The Sherman Act is designed to preserve and promote free trade. So, in your scenario, the supplier may be one (or the only) supplier of a certain product. The store could be the only store selling this product; or, have contracts to all the limited suppliers of a certain product to only sell to that particular store. In such a case, this would probably be illegal under the Clayton Act (exclusive contracts, tying products contracts). Note, this only illegal when it results in lessening competition, a term of art, really, for the courts to decide.

JerH
01-18-2005, 12:26 PM
This falls under the general concept of anti-trust. After doing some more research on the net I have found that it is illegal for suppliers to require "tie-ins"; e.g., I will only sell you our cosmetic line if you also agree to buy our electric eyebrow tweezers. The theory here, is that you are restraining trade by freezing out other manufacturers of eyebrow tweezers.

Hmmm, that's interesting because I think my company does have a clause to that effect in our agreement with dealers. I don't think we've ever enforced it, though.

As to your original question: if it's not legal, there are a whole lot of suppliers breaking the law. To again use my company as an example: each of our dealers is assigned a certain territory that they are allowed to sell our product in. If we sold to another dealer in that territory, we would undermine our relationship with the 1st dealer and we won't sell to them (though we'll sometimes arrange things so that the 2nd dealer will buy the product from the 1st at some price between retail and wholesale price). While our dealers aren't retail stores, I previously worked at a company whose products were sold retail and had a similar arrangement - they wouldn't sell to 2 dealers in the same territory, and they had fairly strict requirements about who could become a dealer (mostly having to do with the ability to repair & service the products).

kunilou
01-18-2005, 12:29 PM
I was looking for a very fine piece of restaurant equipment, and on the manufacturer's web site, it said "Sorry. We do not sell to individuals or households, only commercial businesses."

shefDave
01-18-2005, 01:20 PM
I am often amazed by the number of people who seem to think they have a god-given right to buy things, e.g. ... "The price tag said 3.99 instead of 399, so they have to sell it at the lower price". If the shop/wholesaler owns the goods, they call the shots.

Not especially relevant to the OP, but in the UK certainly, a retailer can't get away with having the wrong price tag on an item, even if it's a mistake.

[quote]
Misleading Price Indications
(1) Subject to the following provisions of this Part, a person shall be guilty of an offence if, in the course of any business of his, he gives (by any means whatever) to any consumers an indication which is misleading as to the price at which any goods, services, accommodation or facilities are available (whether generally or from particular persons).

(2) Subject as aforesaid, a person shall be guilty of an offence if--

(a) in the course of any business of his, he has given an indication to any consumer which, after it was given, has become misleading as mentioned in subsection (1) above; and

(b) some or all of those consumers might reasonably be expected to rely on the indication at a time after it has become misleading; and

(c) he fails to take all such steps as are reasonable to prevent those consumers from relying on the indication.[quote]

Consumer Protection Act 1987 ch. 43 s. 20

If you're found guilty, it's a 5 000 fine, I believe.

I'm not sure on the situation in the US.

Zebra
01-18-2005, 02:31 PM
What type of store is this?

Is it a convience store and someone like Frito-lay won't sell them chips?

Or is it something more like an hardware store and Black and Decker won't sell to them?

How far away is the competitor and how big is the town?


I work in the movie biz and there are many places where the theatres are too close together and we will only show the movie in one of the places but generally if we don't show movie A in a place then they get movie B when it comes out.



The supplier may just not want to sell to the new store because they don't want to take a credit risk. If the store does well they may change their minds down the line.

Hampshire
01-18-2005, 05:00 PM
Not especially relevant to the OP, but in the UK certainly, a retailer can't get away with having the wrong price tag on an item, even if it's a mistake.


We had this happen at one of our large retail stores in the U.S.

Employee changes an item on an endcap but fails to change the price sign.
It now appears that we are selling the Sony home stereo for $99 rather than the correct price of $499.
Customer complains that he want's it for the posted price of $99. I explain that the price was in error.
He says it's not his problem and he wants it for $99.
I tell him no.
He says he'll call the police.
I say go ahead.
Police arrive.
Police tell him no.
Guy starts to get irrate.
Police tell him he'll have to leave.
Police ask me if I want him trespassed (i.e. he can't come back in the store)
I say no, that's okay.

shefDave
01-18-2005, 06:44 PM
I'm not sure on the situation in the US.

a bit of research later...

From the looks of this report (http://www.ftc.gov/reports/scanner2/scanner2.htm#Recommendations%20for%20Consumers) there's no similar law in the US.

Of course, in the UK if the price is wrong, the customer who complains isn't entitled to the product at the advertised price. They're just entitled to tell the local Trading Standards department who can get the salesperson taken to court and fined. So in most cases (at least in my experience as a salesperson) the shop gives in and sells at the advertised price.

pokey
01-18-2005, 09:59 PM
He says he'll call the police.
I say go ahead.
Police arrive.
I can't believe the police would even come out for a guy who calls them to complain about a thing like that.

I asked about the price tag thing once but it wasn't really completely resovled and I was asking specificly about Canada. The thread is here (http://boards.straightdope.com/sdmb/showthread.php?t=176957), though.

astro
01-18-2005, 10:07 PM
Not especially relevant to the OP, but in the UK certainly, a retailer can't get away with having the wrong price tag on an item, even if it's a mistake.

[quote]
Misleading Price Indications
(1) Subject to the following provisions of this Part, a person shall be guilty of an offence if, in the course of any business of his, he gives (by any means whatever) to any consumers an indication which is misleading as to the price at which any goods, services, accommodation or facilities are available (whether generally or from particular persons).

(2) Subject as aforesaid, a person shall be guilty of an offence if--

(a) in the course of any business of his, he has given an indication to any consumer which, after it was given, has become misleading as mentioned in subsection (1) above; and

(b) some or all of those consumers might reasonably be expected to rely on the indication at a time after it has become misleading; and

(c) he fails to take all such steps as are reasonable to prevent those consumers from relying on the indication.[quote]

Consumer Protection Act 1987 ch. 43 s. 20

If you're found guilty, it's a 5 000 fine, I believe.

I'm not sure on the situation in the US.

This sounds absurd. Intent has to factor into this someplace. I can't believe that a huge mis-pricing mistake is going to stand (even in the UK) unless it's proved to be part of some pattern of deception.

Nametag
01-18-2005, 10:18 PM
...he fails to take all such steps as are reasonable to prevent those consumers from relying on the indication. It seems to me that this part makes it clear that that law only covers intentional price fraud. Certainly if he is unaware of a mistake in labeling, no action at all is as reasonable as any action.

Princhester
01-18-2005, 10:33 PM
[QUOTE=shefDaveOf course, in the UK if the price is wrong, the customer who complains isn't entitled to the product at the advertised price. They're just entitled to tell the local Trading Standards department who can get the salesperson taken to court and fined. So in most cases (at least in my experience as a salesperson) the shop gives in and sells at the advertised price.[/QUOTE]

Yeah what Astro said. I'm an Australian not an English lawyer, but the two legal systems are very similar. As a general proposition, criminal offences require intent, and they are subject to the defence of mistake.

At least on the face of it, the offence you outline is going to apply where someone knowingly misleads customers.

Princhester
01-18-2005, 10:36 PM
I'll try that again.

Of course, in the UK if the price is wrong, the customer who complains isn't entitled to the product at the advertised price. They're just entitled to tell the local Trading Standards department who can get the salesperson taken to court and fined. So in most cases (at least in my experience as a salesperson) the shop gives in and sells at the advertised price.

Yeah what Astro said. I'm an Australian not an English lawyer, but the two legal systems are very similar. As a general proposition, criminal offences require intent, and they are subject to the defence of mistake.

At least on the face of it, the offence you outline is going to apply where someone knowingly misleads customers.

Send questions for Cecil Adams to: cecil@straightdope.com

Send comments about this website to: webmaster@straightdope.com

Terms of Use / Privacy Policy

Advertise on the Straight Dope!
(Your direct line to thousands of the smartest, hippest people on the planet, plus a few total dipsticks.)

Copyright 2018 STM Reader, LLC.