Cotton Converting Industry

16 CFR Part 110 · Trade practice rules · in the Code of Federal Regulations 1938-1976 (15 annual editions)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

Latest edition: Library of Congress, 1976 CFR · Earliest edition: 1938 CFR

Text (1976 edition, OCR)

§ 109.14

iow price of a competitor, or the services or

facilities furnished by a competitor.”

$109.14 Aiding or abetting use of un-
fair trade practices.

It is an unfair trade practice for any
industry member to aid, abet, coerce, or
induce another, directly or indirectly, to
use or promote the use of any unfair
trade practice specified in §§ 109.0 to
109.14.

COMMITTEE ON TRADE PRACTICES

§ 109.201 Industry committce.

The provisions of § 16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.

PART 110—COTTON CONVERTING

INDUSTRY
Grour 1

Sec.

110.1  Misrepresentation of industry prod-
ucts.

110.2 Misbranding.

110.3. False invoicing.

110.4 Deception as to origin.

110.5 Substitution of products.

110.6 Inducing breech of contract.

110.7 Commercial bribery.

110.8 Imitation of trade-marks, etc.

110.9 Defamation of competitors or dis-
paragement of their products.

110.10 Fictitious price lists.

110.11 Use of lottery schemes.

110.12 Prohibited discrimination.

110.13 Aiding or abetting use of unfair
trade practices.

Group IT

110.101 Saturday and Sunday closings.

110.102 Repudiation of contracts.

110.103 Information as to width, count and
weight to appear on invoices and
confirmations of orders,

110.104 Use of samples.

AurHority: Secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.

Source: 14 FR 2588, May 17, 1949, unless
otherwise noted.

Group I

§ 110.1 Misrepresentation of industry
products.

It is an unfair trade practice to make
or publish, or cause to be made or pub-
lished, directly or indirectly, any false,
misleading or deceptive statement or rep-
resentation, by way of advertisement or
otherwise, concerning the grade, quality,
quantity, use, size, material, content,

Title 16—Commercial Practices

thread count, origin, shrinkage proper-
ties, colorfastness, washability, produc-
tion, manufacture or distribution of any
product of the industry or concerning
any component of such product, or in any
other material respect.

§ 110.2 Misbranding.

The false or deceptive marking or
branding of products of the industry with
respect to the grade, quality, quantity,
use, size, material, content, thread count,
origin, shrinkage properties, colorfast-
ness, washability, production, manufac-
ture or distribution of such products, or
in any other material respect, is an un-
fair trade practice.

§ 110.3 False invoicing.

Withholding from or inserting in in-
voices any statements or information by
reason of which omission or insertion a
false record is made, wholly or in part,
of the transactions represented on the
face of such invoices, with the effect of
thereby misleading or deceiving pur-
chasers, prospective purchasers of the
consuming public, is an unfair trade
practice.

§ 110.4 Deception as to origin.

In respect to any fabrics of the follow-
ing types: Fabrics which have been
woven or fabricated in a foreign country
and imported in the gray or other un-
finished state and dyed or finished in the
United States; or fabrics which have
been imported in the finished state and
dyed, redyed or refinished in the United
States; is an unfair trade practice:

(a) To offer for sale, sell or distribute
any such fabrics under marks, stamps,
brands, labels or representations which
have the capacity and tendency or effect
of misleading or deceiving purchasers or
the consuming public into the erroneous
belief that such fabrics were woven or
fabricated in the United States, or that
they were not so dyed, finished, redyed
or refinished in the United States, as the
case may be; or

(b) To offer for sale, sell or distribute
any such fabrics without the same being
marked, stamped, branded or labeled so
as to indicate clearly and nondeceptively
(1) the country of origin of the fabric,
and (2) that such fabrics were woven or
fabricated in such country and were dyed
or finished or redyed or refinished in the
United States, as the case may be; the
failure, refusal or omission to so mark,
stamp, brand or labe) such fabrics having

534


Chapter 1—Federal

the tendency and capacity or result of
thereby promoting, abetting or effectuat-
ing the marketing of such products under
conditions which are misleading or de-
ceptive to purchasers or the consuming
public.

Nors: Nothing in this section shall be con-
strued as relieving any member of the indus-
try or other party of the necessity of comply-
ing with the requirements of the customs
jaws or regulations, or other applicable provi-
sions of law or regulation, relating to the
marking of imported articles.

Cross REFERENCE: For regulations of the
Bureau of Customs, see 19 CFR Chapter I.

§ 110.5 Substitution of products.

The practice of shipping or delivering
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to rep-
resentations made prior to securing the
order, without the consent of the pur-
chasers to such substitutions and with
the tendency, capacity or effect of mis-
leading or deceiving purchasers, prospec-
tive purchasers or the consuming public,
is an unfair trade practice,

§ 110.6 Inducing breach of contract.

Inducing or attempting to induce the
breach of existing lawful contracts be-
tween competitors and their customers
or their suppliers by any false or de-
ceptive means whatsoever, or interfering
with or obstructing the performance of
any such contractual duties or services
by any such means, with the purpose and
effect of unduly hampering, injuring or
prejudicing competitors in their busi-
nesses, is an unfair trade practice.

§ 110.7 Commercial bribery.

It is an unfair trade practice for a
member of the industry directly or indi-
rectly to give, or offer to give, or permit
or cause to be given, money or anything
of value to agents, employees or repre-
sentatives of customers or prospective
customers, or to agents, employees or
representatives of competitors’ customers
or prospective customers, without the
knowledge of their employers or princi-
pals, as an inducement to influence their
employers or principals to purchase or
contract to purchase products manufac-
tured or sold by such industry member or
the maker of such gift or offer, or to in-
fluence such employers or principals to
refrain from dealing in the products of
competitors or from dealing or contract-
ing to deal with competitors.

Trade Commission § 110.12

§ 110.8 Imitation of trade-marks, etc.

The practice of imitating or causing to
be imitated, or directly or indirectly pro-
moting or aiding the imitation of, the
trade-marks, trade names or other ex-
clusively owned symbols or marks of
identification of competitors, or the ex-
clusively owned patterns of competitors
which have not been directly or by opera-
tion of law dedicated to the public, hav-
ing the capacity, tendency or effect of
misleading or deceiving purchasers, pro-
spective purchasers or- the consuming
public, ls an unfair trade practice.

§ 110.9 Defamation of competitors or
disparagement of their prodncts.

The defamation of competitors by
false imputing to them dishonorable
conduct, inability to perform contracts,
questionable credit standing, or by other
false representations, or the false dis-
paragement of the grade, quality or man-
ufacture of the products of competitors
or of their business methods, selling
prices, values, credit terms, policies or
services, or conditions of employment, is
an unfair trade practice.

§ 110.10 Fictitious price lists.

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations, price lists, terms
or conditions of sale, or reports as to pro-
duction or sales, with the tendency and
capacity or effect of misleading or deceiv-
ing purchasers, prospective purchasers
or the consuming public, is an unfair
trade practice.

§ 110.11 Use of lottery schemes.

The offering or giving of prizes, pre-~
miums or gifts in connection with the
sale of industry products, or as an in-
ducement thereto, by any scheme which
involves lottery or scheme of chance, is
an unfair trade practice.

§ 110.12 Prohibited discrimination?

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,

1As used in this section the word “com~
merce” means “trade or commerce among the
several States and with foreign nations, or
between the District of Columbia or any Ter-
ritory of the United States and any State,
Territory, or foreign nation, or between any
insular possessions or other places under the
jurisdiction of the United States, or between
any such possession or place and any State or
Territory of the United States or the District
of Columbia or any foreign nation, or
within the District of Columbia or any Ter-
ritory or any insular possession or other place
under the jurisdiction of the United States.”

535


§ 110.12

etc., which effect unlawful price discrim-
ination. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-
merce, to grant or allow, secretly or
openly, directly or indirectly, any rebate,
refund, discount, or credit, or freight or
transportation cost or any percentage
thereof, or other form of price differen-
tial (whether in the guise of samples or
otherwise), where such rebate, refund,
discount, or credlt, or freight or trans-
portation cost or any percentage thereof,
or other form of price differential, effects
a discrimination in price between differ-
ent purchasers of goods of like grade and
quality, where either or any of the pur-
chases involved therein are in commerce,
and where the effect thereof may be sub-
stantially to lessen competition or tend
to create a monopoly in any line of com-
merce, or to injure, destroy, or prevent
competition with any person who either
grants or knowingly receives the benefit
of such discrimination or with customers
of either of them: Provided, however:

(1) That the goods involved in any
such transaction are sold for use, con-
sumption, or resale within any place
under the jurisdiction of the United
States;

(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture, sale,
or delivery resulting from the differing
methods or quantities in which such com-
modities are to such purchasers sold or
delivered;

(3) That nothing contamed in this
paragraph shall prevent persons engaged
in selling goods, wares, or merchandise in
commerce from selecting their own cus-
tomers in bona fide transactions and not
in restraint of trade;

(4) That nothing contained in this
paragraph shall prevent price changes
from time to time where made in re-
sponse to changing conditions affecting
either G) the market for the goods con-
cerned, or (ii) the marketability of the
goods, such as, but not limited to, actual
or imminent deterioration of perishable
goods, obsolescence of seasonal goods,
distress sales under court process, or
sales in good faith in discontinuance of
business in the goods concerned.

(b) Prohibited brokerage and commis-
sions, It is an unfair trade practice for
any inember of the industry engaged in
commerce, in the course of such com-
merce, to pay or grant, or to receive or

Title 16—-Commercial Practices

accept, anything of value as & com-
mission, brokerage, or other compensa~-
tion, or any allowance or discount in lieu
thereof, except for services rendered in
connection with the sale or purchase of
goods, wares, or merchandise, either to
the other party to such transaction or to
an agent, representative, or other in-
termediary therein, where such interme-
diary is acting in fact for or in behalf,
or is subject to the direct or indirect con-
trol, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(ec) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member of the in-
dustry engaged in commerce to pay or
contract for the payment of advertising
or promotional allowances or any other
thing of value to or for the benefit of a
customer of such member, in the course
of such commerce, as compensation or in
consideration for any services or facili-
ties furnished by or through such cus-
tomer in connection with the processing,
handling, sale, or offering for sale of any
products or commodities manufactured,
sold, or offered for sale by such member,
unless such payment or consideration is
available on proportionally equal terms
to all other customers coinpeting in the
distribution of such products or com-
modities.

(d) Prohibited discriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry en-
gaged in commerce to discriminate in
favor of one purchaser against another
purchaser or purchasers of a commodity
bought for resale, with or without proc-
essing, by contracting to furnish or fur-
nishing, or by contributing to the fur-
nishing of, any services or facilities con-
nected with the processing, handling,
sale, or offering for sale of such commod-
ity so purchased upon terms not accord-
ed to all purchasers on proportionally
equal terms. ;

(e) Inducing or receiving an illegal
discrimination in price. It is an unfair
trade practice for any member of the in-
dustry engaged in commerce, in the
course of such commerce, knowingly to
induce or receive a discrimination in
price which is prohibited by the pro-
visions in paragraphs (a) to (d) of this
section,

(f) Exemptions. The inhibitions of
this section shall not apply to purchases
of their supplies for their own use by
schools, colleges, universities, public li-

5386


Chapter I—Federal Trade Commission

braries, churches, hospitals, and charita-
ble institutions not operated for profit.

§ 110.13 Aiding or abetting use of un-
fair trade practices.

It is an unfair trade practice for any
person, firm, or corporation to aid, abet,
coerce or induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in §§ 110.1
to 110.12.

Group II

'§ 110.101 ‘Saturday and Sunday clos-
ings.

In the interest of the public and
of itself, the industry urges all mem-
bers of the industry to adhere to the
practice of not opening their sales of-
fices on Saturdays and Sundays for the
transaction of business. ;

§ 110.102 Repudiation of contracts.

Lawful contracts are business obliga-
tions which should be performed in lIet-
ter and in spirit. The repudiation of
contracts by sellers on a rising market
or by buyers on a declining market is
condemned by the industry.

§ 110.103 Information as to width,
connt and weight to appear on in-
voices and confirmations of orders.

When goods are sold by specifications
or construction, in order that accurate
information regarding the type of goods
sold or offered for sale may be known to
purchasers, the industry approves the
practice of placing on the confirmation of
order and’on the invoice the gray con-
struction, i.e., gray width, count and
weight, in the case where the goods sold
are to be delivered in the gray; and in
the case where the goods solid are to be
delivered in the finished state, the in-
dustry approves the practice of placing
on the confirmation of order and mvoice
the finished construction, i.e., the width,
count and weight in such finished state.
The omission from the confirmation of
order or invoice of any such information
required by this section is condemned by
the industry.

§ 110.104 Use of samples.

The industry disapproves the giving of
samples without charge except only as
may be necessary to acquaint purchasers
or prospective purchasers with the grade
or quality of the product offered for sale.
However, the furnishing of samples shall
not be carried out in a manner involving

58-063-~76 35

“$114.4

discrimination contrary to the provisions
of § 110.12.

PART 114—PRESERVE MANUFAC-
TURING INDUSTRY *
Group I
Sec.
114.1 Falsely advertising, marking or brand-
ing preserves.

114.2 Disclosure in respect to imitations.
114.3 False invoicing.

AurTHoriry: Secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46(g), 45, unless otherwise noted.

Source: Trade practice rules, Preserve
Manufacturing Industry, FTC, Sept. 12, 1936,
unless otherwise noted.

§ 114.1 Falsely advertising, marking or
branding preserves.

The practice of selling, advertising,
describing, branding, marking, labeling
or packing of fruit preserves, fruit jams,
fruit jellies or apple butter, or any simu-
lation thereof, in a manner which is cal-
culated to mislead or deceive, or has the
tendency and capacity or effect of mis-
leading or deceiving, purchasers, pro-
spective purchasers or the consuming
public, with respect to the character,
nature, content, grade, quality, quantity,
substance, material, preparation or
manufacture of such product, or in any
other material respect, is an unfair trade
practice. For purposes of this section:

(a) Preserve, fruit preserve, jam, fruit
jam, are understood to mean the clean,
sound fruit product possessing definite
characteristic flavor of the preserved
fruit or fruits named on the label, made
by cooking or concentrating to a suitable
consistency properly prepared, clean,
sound, entire edible portion of fresh
frult, cold-packed fruit, canned fruit, or
a mixture of two or all of these, with
sugar or with sugar and water, with or
without spice or vinegar, or with such
harmless organic acids as may be neces-
sary to compensate for natural acid defi-
ciency: of the particular fruit used, but

1Thls part does not, in any respect, sup-
plant or reiieve anyone of the necessity of
complying with the legal requirements of the
pure food laws or other provisions of law.
They are established under the Federal Trade
Commission Act for the purpose of more ef-
fectiveiy stamping out unfair competitive
practices in the interest of the public, and
to assist in general law enforcement to this
end.

587