NEW HAMPSHIRE

REGULATION OF PRICE COMPETITION

A. RESALE PRICE MAINTENANCE

L. 1937, c. 184

Sec. 1. Fair Trade Act.-No contract relating to the sale or resale of a commodity which bears, or the label or content of which bears, the trade-mark, brand, or name of the producers or owner of such commodity and which is in fair and open competition with commodities of the same general class produced by others shall be deemed in violation of any law of the State by reason of any of the following provisions which may be contained in such contract: That the buyer will not resell such commodity at less than the minimum price stipulated by the vendor; that the producer or vendee of a commodity require upon the sale of such commodity to another, that such purchaser agree that he will not in turn, resell such commodity at less than the minimum price stipulated by such producer or vendee. Such provisions in any contract shall be deemed to contain or imply conditions that such commodity may be resold without reference to such agreement in the following cases:

I. In closing out the owner's stock for the purpose of discontinuing delivery of any such commodity: Provided, however, That such stock is first offered to the manufacturer of such stock at the original invoice price, at least ten days before such stock shall be offered for sale to the public.

II. When the goods are damaged or deteriorated in quality, and notice is given to the public thereof.

III. By any officer acting under the orders of any court.

Sec. 2. Unfair competition.-Wilfully and knowingly advertising, offering for sale, selling, or disposing of any commodity at less than the price stipulated in any contract entered into pursuant to the provisions of the preceding section, whether the person so advertising, offering for sale, selling, or disposing of is or is not a party to such

contract, is unfair competition and is actionable at the suit of any person injured thereby.

Sec. 3. Exception.-This act shall not apply to any contract or agreement between producers or between wholesalers, or between retailers as to sale or resale prices.

Sec. 4. Injunction.-Any person, firm, corporation, or incorporated trade association may maintain an action in the superior court to enjoin a continuance of any act or acts in violation of section 2 hereof and if injured thereby for the recovery of damages. If, in such action, the court shall find that the defendant is violating or has violated any of the provisions of said section 2 it shall enjoin the defendant from a continuance thereof. It shall not be necessary that actual damages to the plaintiff be alleged or proved. In addition to such injunctive relief, the plaintiff in said action shall be entitled to recover from the defendant three times the amount of the actual damages, if any, sustained.

Sec. 5. Act named.-This act may be known and cited as the "Fair Trade Act."

Sec. 6. Take effect.-This act shall take effect upon its passage.

NEW JERSEY

REGULATION OF PRICE COMPETITION

1

A. RESALE PRICE MAINTENANCE 1

Rev. Stat. (1937), as amended by L. 1938, c. 165

Sec. 56:4-3. Definitions.-As used in this article: "Producer" means grower, baker, maker, manufacturer, or publisher. "Commodity" means any subject of commerce.

Source L. 1935, c. 58, sec. 4, p. 141.

Sec. 56: 4-4. Application of article.-This article shall not apply to any contract or agreement between wholesalers or between producers or between retailers as to sale or resale prices.

Source L. 1935, c. 58, sec. 3, p. 141.

Sec. 56: 4-5. (1) No contract relating to the sale or resale of a commodity which bears, or the label or content of which bears, or the vending equipment from which said commodity is sold to consumers bears, the trade-mark, brand, or the name of the producer or owner of such commodity and which is in fair and open competition with commodities of the same general class produced by others shall be deemed in violation of any law of this State by reason of any of the following provisions which may be contained in such contract:

(a) That the buyer will not resell such commodity except at the price stipulated by the vendor;

(b) That the producer or vendee of a commodity require upon the sale of such commodity to another, that such purchaser agree that he will not, in turn, resell except at the price stipulated by such producer or vendee.

'The Fair Trade Act is constitutional, the court citing Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183, 57 Sup. Ct. 139, 81 L. Ed. 109 (1936) as authority. Johnson & Johnson v. Weissbard Bros., 121 N. J. Eq. 585, 191 Atl. 873 (1937) rev'g 120 N. J. Eq. 314, 184 Atl. 783 (1936). PARTIES ESTABLISHING A RESALE PRICE.

In allowing a wholesaler to fix a resale price, it was held that the statute does not require the resale price to be fixed by or on behalf of the owner of the

(2) Such provisions in any contract shall be deemed to contain or imply conditions that such commodities may be resold without reference to such agreement in the following cases:

(a) In closing out the owners' stock for the purpose of discontinuing delivering any such commodity;

(b) When the goods are damaged or deteriorated in quality, and notice is given the public thereof;

trade-mark. Schenley Products Co. v. Franklin Stores Co.. 124 N. J. Eq. 100, 199 Atl. 402 (1938) rev'g 122 N. J. Eq. 69, 192 Atl. 375 (1937). A "sole exclusive distributor" can establish a resale price.

Houbigant Sales

Corp. v. Woods Cut Rate Store, 123 N. J. Eq. 40, 196 Atl. 683 (1937).
MANNER OF ESTABLISHING A RESALE PRICE.

The statute requires that a resale price must be fixed by and incorporated in a contract. Houbigant Sales Corp. v. Woods Cut Rate Store, supra. A single valid contract is sufficient to establish a resale price restriction and put the statute in operation. Revlon Nail Enamel Corp. v. Charmley Drug Store, 123 N. J. Eq. 301, 197 Atl. 661 (1938). A separate consideration is not necessary to support a resale price restriction incorporated in a contract. Houbigant Sales Corp. v. Woods Cut Rate Store, supra.

EXCEPTED SALES.

The retailer may remove the mark or brand and sell the merchandise he owns at his own price but he may not utilize the goodwill of another without complying with the statute. Johnson & Johnson v. Weissbard Bros., supra. It is no defense that the liquor law forbids the removal of the label, thereby preventing the retailer from avoiding the resale price restriction. Products Co. v. Franklin Stores Co., supra.

INDIRECT PRICE CUTTING.

Schenley

A department store which allows its employees a 10-percent discount on all merchandise in the store is in violation of the statute when the net price to the employees is less than the price established under a Fair Trade contract. Bristol-Myers Co. v. Bamberger Co., 122 N. J. Eq. 559, 195 Atl. 625 (1937), aff'd 124 N. J. Eq. 235, 1 Atl. (2d) 332 (1938).

PARTIES BOUND BY A RESALE PRICE RESTRICTION.

Resale prices established under the Fair Trade Act are binding upon noncontracting retailers only with respect to so much of the maker's products as were acquired by the retailer with notice of the prices so fixed. Lentheric Inc. v. Weissbard Bros., 122 N. J. Eq. 573, 195 Atl. 818 (1937); Johnson & Johnson v. Weissbard Bros., supra. See also Burnstein v. Charlines, 10 Atl. (2d) 646 (1940).

DEFENSES TO VIOLATION OF FAITH TRADE CONTRACTS.

Plaintiff is required to use due diligence in enforcing resale price restrictions. Calvert Distilling Co. v. Gold's Drug Stores, 123 N. J. Eq. 458, 198 Atl. 536 (1938).

Where plaintiff refused to sell to defendant retailer upon the same terms as had been given to other chain stores, an injunction was denied. Lentheric Inc. v. Weissbard Bros., supra. But where plaintiff confined the sale of his product to beauty parlors as a business policy and in order to maintain the standard of his product, refused to sell to drug stores, an injunction was granted against the defendant drug store, the court holding that the defendant was not discriminated against. Revlon Nail Enamel Corp. v. Charmley Drug Store, supra. Where a manufacturer of a commodity on which a resale price had been established allowed another manufacturer to sell both the price-fixed commodity and another article in a combined package for less than the price established for one commodity, defendant retailer was justified in not complying with the price restriction, the manufacturer having abandoned its price structure. Magazine Reneating Razor Co. v. Weissbard Bros., 125 N. J. Eq. 593, 7 Atl. (2d) 411 (1939).

(c) By any officer acting under orders of any court. (L. 1935, c. 58, sec. 1, p. 140; L. 1938, c. 165, sec. 1, p. 375.)

Sec. 56: 4-6. Willfully and knowingly advertising, offering for sale or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provisions of section 56:4-5 of this title, whether the person so advertising, offering for sale, or selling is or is not a party to such contract, is unfair competition and is actionable at the suit of the producer or distributor of such commodity or at the suit of any retailer selling such commodity at not less than the price stipulated in any contract entered into pursuant to the provisions of section 56:4-5 of this title. (L. 1935, c. 58, sec. 2, p. 141; L. 1938, c. 165, sec. 2, p. 376.)

Approved May 14, 1938.

Rev. Stat. (1937)

Sec. 56: 4-1. Unfair practices prohibited. No merchant, firm, or corporation shall appropriate for his or their own use a name, brand, trade-mark, reputation, or goodwill of any maker in whose product such merchant, firm, or corporation deals, or discriminate against the same by depreciating the value of such products in the public mind, or by misrepresentation as to value or quality, or by price inducement, or by unfair discrimination between buyers, or in any other manner whatsoever, except where such products do not carry any notice prohibiting such practices, and except in the case of a receiver's sale or a sale by a concern going out of business.

Source: 1913, c. 210, sec. 1, p. 377, as am. by L. 1915, c. 376, sec. 1, p. 704; L. 1916, c. 107, sec. 1, p. 235 (1924 Suppl., sec. 225-1). Sec. 56: 4-2. Injunction; damages. Any person, firm, or corporation violating any of the provisions of section 56:4-1 of this title

'The statute is constitutional as a valid exercise of the police power of the State, in order to prevent the misuse of the trade-mark and goodwill of another. The contract between the manufacturer and retailer stated that the resale price fixed by the contract could be disregarded if the retailer removed the trade-mark and notice and sold the commodity without the goodwill of the manufacturer. The court granted an injunction restraining the retailer from selling below the fixed prices, stating that the resale price fixed was not for the article but for the use and protection of the trade-mark and good will of the manufacturer. Ingersoll & Bro. v. Hahne, 88 N. J. Eq. 222, 101 Atl. 1030 (1917); 89 N. J. Eq. 332, 108 Atl. 128 (1918).

Where a manufacturer in selling watches to a jobber forbade the jobber from selling the watches at prices less than those specified by the manufacturer, forbade the jobber from selling to retailers designated by the manufacturer as objectionable and prohibited the jobber from granting discounts in sales to retailers, it was held that such notice was too broad under section 56: 4-1, and an injunction against the jobber prohibiting him from selling at less than the fixed prices will be denied. The court stated that the contract would have been invalid at common law as a restriction on a chattel after its sale, and the statute, being strictly construed, did not validate such an extensive arrangement. Ingersoll v. Goldstein, 84 N. J. Eq. 445, 93 Atl. 193 (1915).