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Simple English definitions for legal terms

resale-price maintenance

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A quick definition of resale-price maintenance:

Resale-price maintenance is when a manufacturer makes different retailers sell their product at the same price, which stops competition. This is illegal under antitrust law, but a manufacturer can suggest a retail price without forcing retailers to sell at that price. It's important to have fair competition in the market, and price-fixing can harm the economy.

A more thorough explanation:

Resale-price maintenance is a type of price-fixing where a manufacturer forces or convinces different retailers to sell their product at the same price, which eliminates competition. This practice is illegal under antitrust law, but a manufacturer can suggest a retail price without forcing retailers to sell at that price.

  • A manufacturer of electronics products forces all retailers to sell their products at the same price, preventing any competition between retailers.
  • A clothing brand convinces several retailers to sell their products at a fixed price, which eliminates price competition and ensures that the brand's products are sold at a consistent price across different stores.

These examples illustrate how resale-price maintenance can harm competition and limit consumer choice by forcing retailers to sell products at a fixed price, regardless of market conditions or consumer demand.

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