OREGON

REGULATION OF PRICE COMPETITION

A. RESALE PRICE MAINTENANCE

Code Ann. (Supp., 1935), as amended by L. 1937, c. 113

Sec. 70-401. Contracts relating to sales of articles.-No contract relating to the sale or resale of a commodity which bears, or the label or container of which bears, or the vending equipment through which such commodity is sold bears, the trade-mark, brand, or name of the producer or distributor of such commodity and which commodity is in free and open competition with commodities of the same general class produced or distributed by others shall be deemed in violation of any law of the State of Oregon by reason of any of the following provisions which may be contained in such

contract:

1. That the buyer will not resell such commodity at less than the minimum price stipulated by the seller.

2. That the buyer will require of any dealer to whom he may resell such commodity an agreement that he will not, in turn, resell at less than the minimum price stipulated by the seller.

3. That the seller will not sell such commodity:

(a) To any wholesaler, unless such wholesaler will agree not to resell the same to any retailer unless the retailer will in turn agree not to resell the same except to consumers for use and at not less than the stipulated minimum price, and such wholesaler will likewise agree not to resell the same to any other wholesaler unless such other wholesaler will make the same agreement with any wholesaler or retailer to whom he may resell; or

(b) To any retailer, unless the retailer will agree not to resell the same except to consumers for use and at not less than the stipulated minimum price.

4. No contract containing any of the provisions enumerated in this act shall be deemed to preclude the resale of any commodity

covered thereby without reference to such contract in the following

cases:

(a) In closing out the owners' stock for the bona fide purpose of discontinuing dealing in any such commodity and plain notice of the fact is given to the public, provided the owner of such stock shall give to the producer or distributor of such commodity prompt and reasonable notice in writing of his intention to close out said stock and an opportunity to purchase such stock at the original invoice price;

(b) When the goods are altered, second-hand, damaged, defaced or deteriorated and plain notice of the fact is given to the public in the advertisement and sale thereof, such notice to be conspicuously displayed in all advertisements and to be affixed to the commodity;

(c) By any officer acting under an order of court.

5. For the purpose of preventing evasion of the resale price restrictions imposed in respect of any commodity by any contract entered into pursuant to the provisions of this act, except to the extent authorized by the said contract:

(a) The offering or giving of any article of value in connection with the sale of such commodity;

(b) The offering or the making of any concession of any kind whatsoever, whether by the giving of coupons or otherwise, in connection with any such sale; or

(c) The sale or offering for sale of such commodity in combination with any other commodity, shall be deemed a violation of such resale price restriction, for which the remedies prescribed by this act shall be available.

6. No minimum resale price shall be established for any commodity, under any contract entered into pursuant to the provisions of this act, by any person other than the owner of the trade-mark, brand, or name used in connection with such commodity or a distributor specifically authorized to establish said price by the owner of such trade-mark, brand, or name.

Sec. 70-402. Acts deemed a violation.-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 70-401, Oregon Code, 1935 Supplement, as amended by section 1 of this act, 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 any person damaged thereby.

Sec. 70-403. Application of act.-This act shall not apply to any contract or agreement between or among producers or distributors

or, except as provided in section 70-401, subsection 3, between or among wholesalers, or between or among retailers, as to sale or resale prices.

Sec. 70-404. Defined. The following terms, as used in this act, hereby are defined as follows:

(a) "Producer" means any grower, baker, maker, manufacturer, bottler, packer, converter, processor, or publisher.

(b) "Commodity" means any subject of commerce.

(c) "Wholesaler" means any person selling a commodity other than a producer or retailer.

(d) "Retailer" means any person selling a commodity to consumers for use.

(e) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a business trust, or any unincorporated organization.

Sec. 70-405. Provisions of act severable.—If any provision of this act is declared unconstitutional it is the intent of the legislature that the remaining portions thereof shall not be affected, but that such remaining portions remain in full force and effect. (L. 1935, ch. 295, sec. 5, p. 45.)

Sec. 70-406. Short title of act.-This act may be known and cited as the "Fair Trade Act." (Id., sec. 6.)

Sec. 6. Inconsistent acts repealed.-That all acts or parts of acts inconsistent herewith hereby are repealed to the extent of such inconsistency. (L. 1937, ch. 113, sec. 6.)

B. PROHIBITION OF SALES BELOW COST

L. 1937, c. 215, as amended by L. 1939, c. 495

Unfair Practices Act

Section 1. Definitions.-When used in this act, unless the context otherwise requires:

(a) The term "person" means an individual, a corporation, a partnership, an association, a joint stock company, a business trust, or an unincorporated organization;

(b) The term "price" as used herein shall mean the net price to the buyer after the deduction of all discounts, rebates, or other price concessions paid or allowed by the seller;

(c) The term "commerce" means trade or commerce within this state, exclusive of "food commerce" as herein defined;

(d) The term "food commerce" means trade or commerce within this state in articles of food for human consumption and such other articles as usually are sold in food stores in connection with articles of food for human consumption. "Retailer in food commerce" means

any person engaged in food commerce who sells directly to the consumer for use. "Wholesaler in food commerce" means any person engaged in food commerce other than a retailer or producer, manufacturer, or processor.

(e) The term "replacement cost" shall mean the cost per unit at the retail outlet at which the merchandise sold or offered for sale could have been bought by the seller at any time within ten (10) days prior to the date of sale or the date upon which it is offered for sale by the seller, if bought in the same quantities as the seller's usual or customary purchase of the said merchandise, after deducting all discounts, rebates, or other price concessions.

(f) Provided, however, The definition "food commerce," as defined in this section, subparagraph "d" is restricted, in the case of persons selling items other than items of food commerce, solely to such items of food commerce as above defined. (As amended March 27, 1939.) Sec. 2. Dealing with price discriminations, see Antidiscrimination Legislation: General Prohibitory Laws, infra.

Sec. 3. Cooperatives.-Nothing in this act shall prevent a cooperative association from returning to its members, producers, or consumers the whole, or any part of, the net earning or surplus resulting from its trading operations, in proportion to their purchases or sales from, to or through the association.

Sec. 4. Sales below cost prohibited.-It shall be unlawful for any person engaged in commerce and/or food commerce, in the course of such commerce, to sell, offer for sale, or advertise for sale, any article, product, or commodity, or service or output of a service trade, at less than cost thereof to such vendor, or give, offer to give, or advertise the intent to give away any article, product, or commodity or service or output of a service trade, where the effect of such sale below cost, or the giving, offering to give, or advertising the intent to give away any article or product, or service, or the output of a service trade, may lessen, injure, destroy, prevent, hinder, or suppress the competition of competitors of such person engaged in business within this state, or to advertise brands or types of goods they are not prepared to supply.

(a) For the purpose of this section the term "cost" as applied to production hereby is defined as including the cost of raw materials, labor and all overhead expenses of the producer, and as applied to distribution, "cost" shall mean the replacement cost of the article, product, or commodity to the distributor and vendor, plus the cost of doing business by said distributor and vendor: Provided, That "cost" as applied to a wholesaler in food commerce shall mean the price paid.

(b) For the purpose of this section, the phrase "cost of doing business" or "overhead expense" is defined as the average of all costs of

doing business incurred in the conduct of such business during the 12 months immediately preceding any alleged violation of this act or in the event any person shall be engaged in business within the state for shorter period of time, in that event the average cost for such period immediately preceding any alleged violation of this act must include without limitation the following items of expense: Labor (including salaries of executives and officers), rent, interest on borrowed capital, depreciation, selling cost, maintenance of equipment, buildings and fixtures, transportation and delivery costs, as fixed under tariffs approved by the public utilities commissioner of the State of Oregon, light, heat, power, and water, credit losses, all types of licenses, taxes, insurance, and advertising.

(c) For the purpose of this act, the phrase "cost of doing business" or "overhead expense" of a "retailer in food commerce" is defined as 6 percent of replacement cost or as the average monthly cost incurred in the conduct of such business during the 12 months immediately preceding any alleged violation of this act, or whichever is lower. In the event any person as herein defined shall be engaged in business within this state for a shorter period of time than one year, then the average cost for such period that such person has been in business immediately preceding any alleged violation of this act shall be the monthly average for the purpose of this act. In computing such cost, it shall include, without limiting, the following items of expense: Labor (including the expense for salaries of executives and officers), rent, interest on borrowed capital, depreciation, selling costs, maintenance of equipment, buildings and fixtures, transportation and delivery costs as fixed under tariffs approved by the public utilities commissioner of the State of Oregon, light, heat, power, and water, credit losses, all types of licenses, taxes, insurance and advertising. (As amended March 27, 1939.)

Sec. 5. Establishing cost.—In establishing the cost of a given article, product, or commodity to the distributor and vendor, the invoice cost of said article, product, or commodity purchased at a forced, bankrupt, close-out sale or other sale outside of the ordinary channels. of trade may not be used as a basis for justifying a price lower than one based upon the replacement cost as of date of such sale of said article, product, or commodity replaced through the ordinary channels of trade, unless said article, product, or commodity is kept separate from goods purchased in the ordinary channels of trade and unless said article, product, or commodity is advertised and sold as merchandise purchased at a forced, bankrupt, close-out sale, or by means other than through the ordinary channels of trade, and said advertising shall state the conditions under which said goods were so purchased, and the quantity of such merchandise to be sold or offered for sale.