Pennsylvania Act 1941-344 — "UNFAIR SALES ACT"

Act text

"UNFAIR SALES ACT"
                 Act of Aug. 11, 1941, P.L. 900, No. 344              Cl. 12
                                  AN ACT

     Defining and prohibiting unfair sales, providing remedies for
        violations thereof, and establishing penalties therefor.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Whereas, The practice of selling certain items of merchandise
     at cost or less than cost in order to attract patronage is
     generally a form of deceptive advertising and an unfair method
     of competition in commerce, and,
        Whereas, Such practice causes commercial dislocations,
     misleads the consumer, works back against the farmer, directly
     burdens and obstructs commerce and diverts business from dealers
     who maintain a fair price policy, and,
        Whereas, Bankruptcies among merchants who fail because of the
     competition of those who use such methods result in
     unemployment, disruption of leases and nonpayment of taxes and
     loans and contribute to the inevitable train of undesirable
     consequences, including economic depression, now therefore,
        Section 1.  This act shall be known and designated and may be
     cited as the "Unfair Sales Act".
        Section 2.  (1)  When used in this act the term "cost to the
     retailer" shall mean the invoice cost of the merchandise to the
     retailer or the replacement cost of the merchandise to the
     retailer, whichever is lower, less all trade discounts, except
     customary discounts for cash, advertising allowances,
     promotional allowances, display allowances and any other
     allowances for services rendered and any other commission or
     remuneration received for services performed on behalf of any
     governmental agencies, to which shall be added (a) freight
     charges not otherwise included in the invoice or the replacement
     cost of the merchandise, (b) a mark-up to cover in part the cost
     of doing business, which mark-up in the absence of proof of a
     lesser cost, shall be not less than four per cent of the total
     cost at retail outlet.
        (2)  When used in this act the term "cost to the wholesaler"
     shall mean the invoice cost of the merchandise to the wholesaler
     or the replacement cost of the merchandise to the wholesaler,
     whichever is lower, less all trade discounts, except customary
     discounts for cash, advertising allowances, promotional
     allowances, display allowances and any other allowances for
     services rendered and any other commission or remuneration
     received for services performed on behalf of any governmental
     agencies, to which shall be added (a) freight charges not
     otherwise included in the invoice or the replacement cost of the
     merchandise and (b) a mark-up to cover in part the cost of doing
     business, which mark-up in the absence of proof of a lesser cost
     shall be not less than two per cent of the total cost at the
     wholesale establishment.
        (3)  Where two or more items are advertised, offered for sale
     or sold at a combined price, the price of each item named shall
     be governed by the provisions of subsection (1) or (2) of
     section two respectively.
        (4)  The terms "sell at retail", "sales at retail" and
     "retail sale" shall mean and include any transfer for a valuable
     consideration made in the ordinary course of trade or in the
     usual prosecution of the seller's business of title to
     merchandise to the purchaser for consumption or use other than
     resale or further processing or manufacturing. The above terms
     shall include any transfer of such merchandise where title is
     retained by the seller as security for the payment of such
     purchase price.
        (5)  The terms "sell at wholesale", "sale at wholesale" and
     "wholesale sales" shall mean and include any transfer for a
     valuable consideration made in the ordinary course of trade or
     the usual prosecution of the seller's business of title to
     merchandise to the purchaser for purposes of resale or further
     processing or manufacturing. The above terms shall include any
     such transfer of merchandise where title is retained by the
     seller as security for the payment of the purchase price.
        (6)  The term "retailer" shall mean and include every person,
     partnership, corporation or association other than a
     manufacturer (not operating a retail business or trade) engaged
     in the business of making sales at retail or performing the
     retail function within this State: Provided, That, in the case
     of a person, partnership, corporation or association other than
     a manufacturer (not operating a retail business or trade)
     engaged in the business of making sales both at retail and at
     wholesale, such terms shall be applied only to the retail
     portion of such business.
        (7)  The term "wholesaler" shall mean and include every
     person, partnership, corporation or association other than a
     manufacturer (not operating a retail business or trade) engaged
     in the business of making sales at wholesale or performing the
     wholesale function of supplying any retailer or retail outlet
     with merchandise for retail sale within this State: Provided,
     That, in the case of a person, partnership, corporation or
     association other than a manufacturer (not operating a retail
     business or trade) engaged in the business of making sales both
     at wholesale and retail, such terms shall be applied only to the
     wholesale portion of such business.
        (8)  Every person, partnership, corporation or association
     other than a manufacturer (not operating a retail business or
     trade) engaged in the business of making sales at retail as
     defined in this act within this State, which, in addition to
     such business, shall purchase merchandise for sale at retail
     from manufacturers, packers, processors, growers or producers
     thereof, without resort to a wholesaler as such, shall be taken,
     deemed and construed for the purpose of this act to be engaged
     in business both as a wholesaler and retailer as defined in this
     act, and, as such, shall be subject to both the retail and
     wholesale mark-up provisions of this act.
        Section 3.  It is hereby declared that advertisement, offer
     to sell or sale of any merchandise, either by retailers or
     wholesalers, at less than cost as defined in this act with the
     intent of unfairly diverting trade from or otherwise injuring a
     competitor or with the result of deceiving any purchaser or
     prospective purchaser, substantially lessening competition,
     unreasonably restraining trade or tending to create a monopoly
     in any line of commerce is an unfair method of competition
     contrary to public policy and in contravention of the policy of
     this act.
        Section 4.  Any retailer who shall, in contravention of the
     policy of this act, advertise, offer to sell or sell at retail
     any item of merchandise at less than cost to the retailer as
     defined in this act, or any wholesaler who shall, in
     contravention of the policy of this act, advertise, offer to
     sell or sell at wholesale any item of merchandise at less than
     cost to the wholesaler as defined in this act, or any person,
     partnership, corporation or association engaged in business both
     as a wholesaler and retailer as defined in this act who shall,
     in contravention of the policy of this act, advertise, offer to
     sell or sell any item of merchandise at less than cost, subject
     to both the retail and wholesale mark-ups provided by this act,
     shall be guilty of a misdemeanor, and, upon conviction thereof,
     be sentenced to pay a fine of not less than fifty dollars ($50)
     nor more than two hundred dollars ($200) and costs of
     prosecution, and, in default thereof, shall undergo imprisonment
     for not more than thirty (30) days. Each advertisement, offer to
     sell or sale shall constitute a separate violation of the
     provisions of this act and shall subject the offender to the
     penalties hereby prescribed. Proof of any such advertisement,
     offer to sell or sale by any retailer or wholesaler in
     contravention of the policy of this act shall be prima facie
     evidence of a violation of this act.
        Section 5.  In addition to the penalties provided in this
     act, the courts of this State are hereby invested with
     jurisdiction to prevent and restrain violations of this act, and
     any person, partnership, corporation or association shall be
     entitled to sue for and have injunctive relief in any court of
     competent jurisdiction against any loss or injury by reason of a
     violation of this act.
        Section 6.  The provisions of this act shall not apply to
     sales at retail or sales at wholesale (a) where merchandise is
     sold in bona fide clearance sales, if advertised, marked and
     sold as such; (b) where perishable merchandise must be sold
     promptly in order to forestall loss; (c) where merchandise is
     imperfect or damaged or is being discontinued and is advertised,
     marked and sold as such; (d) where merchandise is sold upon the
     final liquidation of any business; (e) where merchandise is sold
     for charitable purposes or to relief agencies; (f) where
     merchandise is sold on contract to departments of the government
     or governmental institutions; (g) when the price of merchandise
     is made in good faith to meet competition; (h) where merchandise
     is sold by any officer acting under the order or direction of
     any court; (i) where tools, equipment and materials used by
     employes in their trade or business or appliances and products
     which are used therein and are or may be beneficial to the
     safety, health and working conditions of such employes are sold
     to employes of the seller.
        Section 7.  If any section, sentence, clause or provision of
     this act shall for any reason be held invalid or
     unconstitutional, the validity of the remaining parts hereof
     shall not be affected thereby.
        Section 8.  All acts and parts of acts inconsistent with the
     provisions of this act are hereby repealed.
        Section 9.  The provisions of this act shall become effective
     sixty (60) days after final enactment.