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Trade Practices

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Key provisions of the Trade Practices Act that a business should be aware of in order to avoid a breach of the Act.

Price Fixing

Price fixing is an arrangement or agreement with a competitor to fix, control or maintain a price for products or services you provide. It is also unlawful to attempt to fix prices.

Price fixing includes an arrangement about the discount, rebate or credit.

Price fixing is unlawful whether or not it has an effect on competition.

The agreement, arrangement or understanding does not have to be in writing.

Third Line Forcing

Section 47(6) prohibits a party forcing goods or services in favour of a third party. The most commonly known cases of illegal third line forcing are those involving financiers granting finance on the condition that the borrower takes insurance from an insurance company nominated by such a financier.

In order for there to be a section 47(6) breach the following ingredients must be present:-

- Two products – there is no illegality unless a party supplies one product and “forces” another product;

- Three parties – that is the supplier of goods or services must force other goods or services in favour of a third party;

- A condition whereby the acquirer of goods or services cannot acquire them without also being required to acquire other goods or services from another named third party.

Terms and conditions by a supplier on a buyer and vice versa in Australian business are referred to as vertical restraints. The usual kinds of vertical restraints include:

- Exclusive dealing – the buyer agrees only to buy from the seller;

- Resale price maintenance – the buyer agrees not to resell the product below a certain price;

- Territorial or customer restraints – where the buyer agrees to resell only in certain areas or to certain customers;

- Full-time forcing – the buyer must buy the full line of products of the seller; and

- Tying – as a condition of buying one product, the buyer must also buy another product.

Third line forcing is a form of tying whereby the product (for the purpose of the present discussion the term вЂ

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<h1>Trade Practices</h1><br />by Arul Niles<br />Key provisions of the Trade Practices Act that a business should be aware of in order to avoid a breach of the Act.<br /><br />Price Fixing<br /><br />Price fixing is an arrangement or agreement with a competitor to fix, control or maintain a price for products or services you provide. It is also unlawful to attempt to fix prices.<br /><br />Price fixing includes an arrangement about the discount, rebate or credit.<br /><br />Price fixing is unlawful whether or not it has an effect on competition.<br /><br />The agreement, arrangement or understanding does not have to be in writing.<br /><br />Third Line Forcing<br /><br />Section 47(6) prohibits a party forcing goods or services in favour of a third party. The most commonly known cases of illegal third line forcing are those involving financiers granting finance on the condition that the borrower takes insurance from an insurance company nominated by such a financier.<br /><br />In order for there to be a section 47(6) breach the following ingredients must be present:-<br /><br />- Two products – there is no illegality unless a party supplies one product and “forces” another product;<br /><br />- Three parties – that is the supplier of goods or services must force other goods or services in favour of a third party;<br /><br />- A condition whereby the acquirer of goods or services cannot acquire them without also being required to acquire other goods or services from another named third party.<br /><br />Terms and conditions by a supplier on a buyer and vice versa in Australian business are referred to as vertical restraints. The usual kinds of vertical restraints include:<br /><br />- Exclusive dealing – the buyer agrees only to buy from the seller;<br /><br />- Resale price maintenance – the buyer agrees not to resell the product below a certain price;<br /><br />- Territorial or customer restraints – where the buyer agrees to resell only in certain areas or to certain customers;<br /><br />- Full-time forcing – the buyer must buy the full line of products of the seller; and<br /><br />- Tying – as a condition of buying one product, the buyer must also buy another product.<br /><br />Third line forcing is a form of tying whereby the product (for the purpose of the present discussion the term вЂ<br /><h2>About the Author</h2><p>Arul Niles is a solicitor employed at <a href="http://www.laclawyers.com.au">LAC Business Lawyers</a>. He has many years experience as a business lawyer.</p> <br /><h3><a href="http://www.content4reprint.com/legal/trade-practices.htm" title="Trade Practices">Article Source:</a> <a href="http://www.content4reprint.com" title="Free high quality articles">Content for Reprint</a></h3>