Unfair Trade PracticesDefinitions
Section § 17020
This section tells us that the definitions found in this article are meant to help interpret and understand the terms used in the whole chapter.
Section § 17021
This law clarifies that when they use the word 'person,' they mean not just individual people, but also groups, businesses, and various kinds of organizations and companies, including public corporations.
Section § 17022
In this law, the word "sell" doesn't just mean completing a sale. It also includes actions like offering something for sale or even advertising it.
Section § 17023
Section § 17024
This law section defines what counts as an "article or product" and clarifies that movie films shown in theaters aren't included under this term. It also explains exceptions where the rules don't apply. Specifically, it excludes services and products with rates set by the Public Utilities Commission, including those from both public utility corporations and publicly owned utilities.
Section § 17025
This law defines a 'vendor' as someone who works on, improves, or changes another person's personal property, like goods or belongings.
Section § 17026
This law explains how 'cost' is defined for production, distribution, and warranty service agreements. For producers, cost includes raw materials, labor, and overhead. For distributors and vendors, cost is the lower of the invoice or replacement cost, plus operating costs, with a default 6% markup if operating costs aren't proven. For warranty services, it includes parts, labor, and overhead. Cash payment discounts can't lower these costs.
Section § 17026.1
This law allows retailers to use commissions or rebates they earn to lower the price of cell phones, but they can't reduce the price by more than 10% of the cost or $20, whichever is greater. Cell phone providers can sell phones below cost to match competitors' prices, as long as it's done in good faith. Retailers must clearly display a sign indicating that activating a phone isn't required to buy it. Retailers can't refuse to sell a phone just because a customer doesn't activate it with their service provider, though they can limit the number sold to each customer. This law supports policies against 'bundling,' which ties products or services together unfairly. The Public Utilities Commission can enforce these rules and ensure compliance. These provisions took effect on January 1, 1994, and shouldn't conflict with existing regulations by the Commission.
Section § 17026.5
This law allows cigarette distributors to use regular cash payment discounts offered by manufacturers to reduce their costs, as long as these discounts are offered equally to all distributors. However, it does not apply to any special or early payment discounts.
Section § 17027
This law section states that when determining the cost of an item for a distributor or vendor, you cannot use the cheaper price from a forced, bankruptcy, or closeout sale to justify selling it for less than it would cost to replace it through normal trade channels. However, you can do this if the item is kept separate, and advertised as coming from such a sale. Ads must also include how the item was bought and how much of it is for sale.
Section § 17028
This law defines what the "ordinary channels of trade" are in the context of business. It refers to the regular, everyday transactions where goods are sold and transferred without any damage or deterioration. It specifically excludes unusual sales situations like bankruptcy sales, clearance goods, items from businesses closing down, fire-damaged products, or any goods that are in less than perfect condition. The exclusions listed are examples and not a complete list.
Section § 17029
In this section, 'cost of doing business' or 'overhead expense' refers to all the expenses a business faces while operating. It encompasses a wide range of costs such as employee salaries, rent, interest on loans, equipment upkeep, delivery costs, losses from unpaid credit, various licenses, taxes, insurance, and advertising.
Section § 17030
This law defines a 'loss leader' as a product sold for less than what it costs the seller. The purpose of this is to either encourage customers to buy other things, mislead customers, or harm competitors by drawing their business away.
Section § 17031
This law section deals with locality discrimination, which means charging different prices for the same product in different areas within a state. It applies to selling or providing a product at a lower price in one particular area compared to another.