Consumer Law Library

Infants' And Children's Knitted Outerwear Industry

16 CFR Part 137 · Trade practice rules · in the Code of Federal Regulations 1939-1976 (13 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1939 CFR

Text (1976 edition, OCR)

Chapter I—Federal

PART 137—INFANTS’ AND CHIL-
DREN’S KNITTED OUTERWEAR IN-

DUSTRY *

Sec.
137.1

Group I

Misrepresentation of industry prod-
ucts.

Misbranding.

Fiber identification of product.

Misrepresentation as to character of
business.

Imitation or simulation of trade-
marks, etc. .

Discrimination.

Discriminatory returns.

Consignment sales.

Aiding or abetting use of unfair trade
practices,

Grovp IT
187.101 Unwarranted return of merchandise.

AutTHoRITY: Secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46(g), 45, unless otherwise noted.
Source: 4 FR 2507, June 28, 1939, unless
otherwise noted.
Group I

§ 137.1 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
representation, by way of advertisement
or otherwise, concerning the character,
grade, quality, quantity, substance, na-
ture, material, content, use, origin, size,
serviceability, color, color fastness, work-
manship, washability, fiber content or
identification, shrinkage properties,
manufacture or distribution of such
products, or the yarn or any component
of the product, or in any other mate-
rial respect.

§ 137.2 Misbranding.

The false or deceptive marking or
branding of products of the industry with
respect to the character, grade, quality,
quantity, substance, nature, material,
content, use, origin, size, serviceability,
color, color fastness, workmanship,
washability, fiber content or identifica-
tion, shrinkage properties, manufacture

137.2
137.3
187.4

137.5

137.6
137.7
137.8
137.9

1 This part does not supplant, or relieve any
member of the industry or other party of the
necessity of complying with, the applicable
fiber identification rules and other pertinent
Group I rules approved and promulgated by
the Federal Trade Commission.

Trade Commission § 137.6
or distribution of such products, or the
yarn or any component of the product,
or in any other material respect, is an
unfair trade practice.

§ 137.3 Fiber identification of product.

Identification and disclosure of fiber
and other material content of the prod-
uct of this industry shall be made in
accordance with the applicable require-
ments of the Group I fiber identifica-
tion rules approved and promulgated
by the Commission, such as Part 123 of
this subchapter relating to products con-
taining rayon in whole or in part, and
Part 135 of this subchapter, relating to
products containing or purporting to
contain silk in whole or in part, and such
other provisions of laws and regulations
on the subject as or when made appli-
cable to the products of this industry.

§ 137.4 Misrepresentation as to _ char-
acter of business.

(a) It is an unfair trade practice for
any person, partnership or corporation,
by trade or corporate name or otherwise,
to hold himseif or itself out as being a
manufacturer, producer or importer
when such is not true in fact.

(b) It is an unfair trade practice for
any person, partnership or corporation
in the conduct of business to represent
himself or itself, directly or indirectly,
as having or operating a knitted outer-
wear business, in whole or in part, or
a department or branch thereof, when
such is not true in fact; or in any other
manner to misrepresent the character,
nature or status of the business of such
person, partnership or corporation.

§ 137.5 Imitation or simulation of trade.
marks, ete.

The imitation or simulation of the
trade-marks, trade names, brands or
jabels of competitors, or of the exclu-
sively owned symbols of competitors
which have not been directly or by opera-
tion of law dedicated to the public, with
the tendency and capacity or effect of
misleading or deceiving purchasers or
the consuming public, is an unfair trade
practice.

§ 137.6 Discrimination.

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credit,
etc.) which effect unlawful price dis-

1 Paragraph (a) of § 137.6 shall not be con-
strued as embracing practices prohibited by
paragraphs (b), (c) and (d) of this section.

599


§ 137.7

crimination. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce, in the course of
such commerce, to grant or allow, se-
cretly or openly, directly or indirectly,
any rebate, refund, discount, credit, or
other form of price differential where
such rebate, refund, discount, credit, or
other form of price differential effects a
discrimination in price between different
purchasers of goods of like grade and
quality, where either or any of the pur-
chasers invoived 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, consumption,
or resale within any place under the
jurisdiction of the United States.

(2) That nothing contained in this sec-
tion shall prevent differentials which
make only due allowance for differences
in the cost of manufacture, sale, or de-
livery resulting from the differing meth-
ods or quantities in which such commod-
ities are to such purchasers sold or
dclivered;

(3) That nothing contained in this
section shal! 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 sec-
tion shall prevent price changes from
time to time where made in response to
changing conditions affecting either (i)
the market for the goods concerned, or
(ii) the marketability of the goods, such
as, but not limited to, actual or imminent
deterioration of perishable goods, obso-
lescence 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 com-
missions. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-
merce, to pay or grant, or to receive or
accept, anything of value as a commis-
sion, brokerage, or other compensation
or any allowance or discount in lieu
thereof, except for services rendered in
connection with the sale or purchase of

Title 16——Commercial Practices

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
control, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(c) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member of the

-industry engaged in commerce to pay

or contract for the payment of adver-
tising 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 compensa-
tion or in consideration for any services
or facilities furnished by or through such
customer, in connection with the process-
ing, handling, sale, or offering for sale
of any products or commodities manu-
factured, sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

(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 by
furnishing, 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 commodity so
purchased upon terms not accorded 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 fore-
going provisions of this section.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4,
49 Stat. 1527, 1628; 16 U.S.C. 13, 18a, 13b,
21a)

§ 137.7 Discriminatory returns.

It is an unfair trade practice for any
member of the industry engaged in com-
merce to discriminate in favor of one
customer-purchaser against another cus-
tomer-purchaser of knitted outerwear,
bought from such member of the in-

600


Chopter I—Federal

dustry for resale, by contracting to fur-
nish or furnishing in connection
therewith, upon terms not accorded to all
customer-purchasers on proportionally
equal terms, the service or facility
whereby such favored purchaser is ac-
corded the privilege of returning knitted
outerwear so purchased and receiving
therefor credit or refund of purchase
price: Provided, however, Nothing in this
part shall prohibit or be used to prevent
the return of merchandise by purchaser,
for credit or refund of purchase price,
when and because such merchandise has
not been properly labeled by the seller as
to fiber content, or has been otherwise
falsely or deceptively labeled or repre-
sented, or when and because such
merchandise is defective in material,
workmanship, or in any other respect
contrary to warranty or purchase
contract.

§ 137.8 Consignment sales.

It is an unfair trade practice for any
member of the industry to use the prac-
tice of shipping goods on consignment or
pretended consignment for the purpose
and with the effect of artificially clogging
trade outlets and unduly restricting com-
petitors’ use of said trade outlets in get-
ting their goods to consumers through
regular channels of distribution, or with
such purpose to entirely close said trade
outlets to such competitors so as to sub-
stantially lessen competition or tend to
create a monopoly or to unreasonably
restrain trade: Provided, however, That
nothing in this section shall be construed
or used as restricting or preventing con-
signment shipping or marketing of com-
modities in good falth and without ar-
ticial interference with competitors’
use of the usual channels of distribution
in such manner as thereby to suppress
competition or restrain trade.

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

It is an unfair trade practice for any
person, firm or corporation to ald, abet,
coerce or induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in this
part.

Group II
§ 137.101 Unwarranted return of mer-
cbandise.

The practice, by members of the in-
dustry, of selling merchandise and later
permitting the purchaser to return it

Trade Commission § 137.101

for credit or refund of purchase price,
without just cause, creates waste and
loss, increases the cost of doing business
to the detriment of both the industry and
the public, and is condemned by the in-
dustry, subject, however, to requirements
and limitations set forth in the provisions
of § 137.7, and subject also to the general
limitation that members of the industry
shall not engage in any combination or
conspiracy in restraint of trade or use
any other illegal methods in the regula-
tion, control or prevention of the return
of merchandise.

PART 138—-RIBBON INDUSTRY }

GrouPpI

Sec.

138.0 Definition.

138.1 Misbranding of industry products.

138.2 Misrepresentation of industry prod-
ucts.

188.3 Misrepresentation as to character of
business,

188.4 False invoicing.

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

138.6 Commercial bribery.

138.7 Imitation or simulation of trade-
marks, trade names, ete.

138.8 Circulation of threats of suit.

138.9 Consignment selling.

138.10 Deception as to origin.

138.11 Disclosure of yardage.

138.12 “Cut-edge” and “pasted-back” prod-
ucts.

138.13 Prohibited discriminatory practices.

138.14 Discriminatory returns.

138.15 Fiber identification of product.

138.16 Warranty statement in invoices.

138.17 Seconds.

138.18 Promoting the use of deceptive mar-

keting. methods in the sale of cut+
edge ribbon products.

Group II

138.101 Unwarranted return of merchandise.
188.102 Maintenance of accurate records.

COMMITTEE ON TRADE PRACTICES
138.201 Industry committee.

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

Source: 7 FR 4820, June 30, 1942, unless
otherwise noted.

1This part does not supplant, or relieve
any member of the industry or other party
of the necessity of complying with, such ap-
plicable fiber identification rules and other
pertinent Group I rules as have been or may
be approved and promuglated by the Federal
Trade Commission,

601

58—063—76—— -39