Section § 17020

Explanation

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.

The definitions in this article shall be used in construing this chapter.

Section § 17021

Explanation

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.

“Person” includes any person, firm, association, organization, partnership, business trust, company, corporation or municipal or other public corporation.

Section § 17022

Explanation

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.

“Sell” includes selling, offering for sale or advertising for sale.

Section § 17023

Explanation
This law explains that the term 'give' not only means to give something but also includes the act of offering to give something or even just advertising the intent to give it.
“Give” includes giving, offering to give or advertising the intent to give.

Section § 17024

Explanation

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.

“Article or product” includes any article, product, commodity, thing of value, service or output of a service trade.
Motion picture films when licensed for exhibition to motion picture houses are not articles or products under this chapter.
Nothing in this chapter applies:
(1)CA Business & Professions Code § 17024(1) To any service, article or product for which rates are established under the jurisdiction of the Public Utilities Commission of this State and sold or furnished by any public utility corporation, or installation and repair services rendered in connection with any services, articles or products.
(2)CA Business & Professions Code § 17024(2) To any service, article or product sold or furnished by a publicly owned public utility and upon which the rates would have been established under the jurisdiction of the Public Utilities Commission of this State if such service, article or product had been sold or furnished by a public utility corporation, or installation and repair services rendered in connection with any services, articles or products.

Section § 17025

Explanation

This law defines a 'vendor' as someone who works on, improves, or changes another person's personal property, like goods or belongings.

“Vendor” includes any person who performs work upon, renovates, alters or improves any personal property belonging to another person.

Section § 17026

Explanation

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.

“Cost” as applied to production includes the cost of raw materials, labor and all overhead expenses of the producer.
“Cost” as applied to distribution means the invoice or replacement cost, whichever is lower, of the article or product to the distributor and vendor, plus the cost of doing business by the distributor and vendor and in the absence of proof of cost of doing business a markup of 6 percent on such invoice or replacement cost shall be prima facie proof of such cost of doing business.
“Cost” as applied to warranty service agreements includes the cost of parts, transporting the parts, labor, and all overhead expenses of the service agency.
Discounts granted for cash payments shall not be used to reduce costs.

Section § 17026.1

Explanation

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.

(a)Copy CA Business & Professions Code § 17026.1(a)
(1)Copy CA Business & Professions Code § 17026.1(a)(1) Notwithstanding the provisions of Section 17026, commissions or rebates regularly earned by the retailers of cellular telephones may be used to reduce cost, provided, that in no event shall the reduction exceed the greater of the following:
(A)CA Business & Professions Code § 17026.1(a)(1)(A) Ten percent of cost, as defined in Section 17026.
(B)CA Business & Professions Code § 17026.1(a)(1)(B) Twenty dollars ($20).
(2)CA Business & Professions Code § 17026.1(a)(2) Consistent with the provisions of subdivision (d) of Section 17050, providers of cellular services shall be permitted to sell cellular telephones below cost, provided that sales below cost are a good faith endeavor to meet the legal market prices of competitors in the same locality or trade area.
(b)CA Business & Professions Code § 17026.1(b) In each retail location, all retailers of cellular telephones shall post a large conspicuous sign, in lettering no smaller than 36-point type, that states the following: “Activation of any cellular telephone is not required and the advertised price of any cellular telephone is not contingent upon activation, acceptance, or denial of cellular service by any cellular provider.”
The sign shall be prominently displayed and visible to consumers and located in that area in each retail location where cellular telephones are displayed and purchased.
(c)CA Business & Professions Code § 17026.1(c) No retailer of cellular telephones shall refuse to sell a cellular telephone to any customer solely on the basis of the customer’s refusal to activate the telephone with the provider of cellular service for whom the retailer is an agent. Nothing herein shall preclude a retailer from limiting the number of cellular telephones that he or she is otherwise required under this subdivision to sell to any single customer.
The intent of this subdivision is to reaffirm the Legislature’s support for the Public Utilities Commission’s policy that makes illegal the act, or practice, of “bundling,” as defined and described in relevant decisions and orders of the commission.
(d)CA Business & Professions Code § 17026.1(d) The Public Utilities Commission may adopt rules and regulations to fully implement and enforce the provisions of this section.
(e)CA Business & Professions Code § 17026.1(e) Nothing in this section shall be interpreted to reduce, alter, or otherwise modify the authority of the California Public Utilities Commission to regulate, in any manner, or prohibit, the payment of commissions or rebates to distributors or vendors of cellular telephones. The provisions of this section shall be effective only to the extent that they do not conflict with any applicable regulations, rules, or orders promulgated or issued by the Public Utilities Commission.
(f)CA Business & Professions Code § 17026.1(f) This section shall become operative on January 1, 1994.

Section § 17026.5

Explanation

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.

Notwithstanding the provisions of Section 17026, regular term discounts granted to distributors by manufacturers of cigarettes for cash payment customarily offered to distributors without discrimination may be used to reduce cost.
This section shall not apply to any anticipatory or special discount for cash that may be offered by the manufacturers of cigarettes.

Section § 17027

Explanation

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.

In establishing the cost of a given article or product to the distributor and vendor, the invoice cost of the article or product purchased at a forced, bankruptcy, closeout 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 the date of the sale of the article or product replaced through the ordinary channels of trade, unless the article or product is kept separate from goods purchased in the ordinary channels of trade and unless the article or product is advertised and sold as merchandise purchased at a forced, bankruptcy, closeout sale, or by means other than through the ordinary channels of trade.
Such advertising shall state the conditions under which the goods were purchased, and the quantity of the merchandise to be sold or offered for sale.

Section § 17028

Explanation

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.

“Ordinary channels of trade” means those ordinary, regular and daily transactions in the mercantile trade whereby title to an article or product, in no way damaged or deteriorated, is transferred from one person to another.
“Ordinary channels of trade” does not include bankruptcy sales of stocks, closeout goods, dents, sales of goods bought from a business or merchant retiring from business, fire sales and sales of damaged or deteriorated goods, which damage or deterioration results from any cause whatsoever. This listing is not all inclusive but as example only.

Section § 17029

Explanation

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.

“Cost of doing business” or “overhead expense” means all costs of doing business incurred in the conduct of the business and shall 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, delivery costs, credit losses, all types of licenses, taxes, insurance and advertising.

Section § 17030

Explanation

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.

“Loss leader” means any article or product sold at less than cost:
(a)CA Business & Professions Code § 17030(a) Where the purpose is to induce, promote or encourage the purchase of other merchandise; or
(b)CA Business & Professions Code § 17030(b) Where the effect is a tendency or capacity to mislead or deceive purchasers or prospective purchasers; or
(c)CA Business & Professions Code § 17030(c) Where the effect is to divert trade from or otherwise injure competitors.

Section § 17031

Explanation

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.

Locality discrimination means a discrimination between different sections, communities or cities or portions thereof, or between different locations in such sections, communities, cities or portions thereof in this State, by selling or furnishing an article or product, at a lower price in one section, community or city, or any portion thereof, or in one location in such section, community, or city or any portion thereof, than in another.