Fair Trade Laws

Fair Trade Laws

Introduction to Fair Trade Laws

Fair Trade Laws, in commerce, legislation permitting manufacturers to set minimum resale prices for their branded products sold by retailers to consumers. The proliferation of chain stores prompted attempts to introduce such legislation in the 1920s to prevent the price-cutting policies characteristic of the chains, but passage of regulatory state laws did not occur until California led the way in 1931. By the 1940s all but three states had enacted fair trade laws governing intrastate transactions. Although the Sherman Antitrust Act prohibited all price-fixing agreements in or affecting interstate commerce, it was amended by the Miller-Tydings Act of 1937. This new act permitted resale price maintenance agreements on trademarked commodities sold in interstate commerce in states where contracts between manufacturers or wholesalers and retailers were sanctioned by state legislation. A 1951 Supreme Court ruling released all merchants who had not signed such contracts from the requirements of this act. The McGuire Act, passed by Congress in 1952 , reestablished the requirement that nonsigners abide by the same terms as signers of contracts. Although subsequent Supreme Court rulings upheld price fixing, the laws were challenged in state courts and enforcement became increasing difficult. In 1975 President Gerald Ford signed in law an act repealing the Miller-Tydings and McGuire acts, again making all resale price-fixing agreements affecting interstate commerce a violation of federal antitrust laws. Most states subsequently repealed their fair trade laws.” (1)

Resources

Notes and References

Guide to Fair Trade Laws


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