Rayon, Nylon And Silk Converting Industry
16 CFR Part 180 · Trade practice rules · in the Code of Federal Regulations 1959-1976 (11 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1959 CFR
Text (1976 edition, OCR)
§ 179.3
8179.3 Commercial bribery.
It ts an unfair trade practice for any
member of the industry, directiy 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 material and bind-
ing service from the maker of such gift or
offer, or to influence such employers
or principals to refrain from dealing
or contracting to deal with competitors.
$179.4 Defamation of competitors.
The defamation of competitors by
falsely 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 or quality of
their work, or of their business methods,
values, credit terms, or policies, or in
any other respect, {s an unfair trade
practice.
$179.5 Transactions below cost.
The practice of selling materials and
service below the seller’s cost, when pur-
sued with wrongful intent of thereby in-
juring a competitor and where the effect
of such practice !s to unreasonably re-
Strain trade, tend to create a monopoly,
or substantially lessen competition, is an
unfair trade practice.
This section is not to be construed as
prohibiting all transactions below cost,
but only such selling below the seller’s
cost as is resorted to and pursued as a
monopolistic practice with the wrongful
intent referred to and coupled with the
effect of unreasonably restraining trade,
tending to create a monopoly, or sub-
stantially lessening competition.
The costs referred to in the section are
actual costs of the respective seller and
not some other figure or average costs
in the industry determined by an indus-
try cost survey or otherwise.
$179.6 Enticing away employees of
competitors.
Willfully enticing away the employees
of competitors, with the purpose and ef-
fect of thereby hampering or injuring
Title 16—Commercial Practices
competitors in their business nud de-
stroying or substantially lessening com-
Petition, is an unfair trade practice.
Nots: Nothing in this section shall be
construed as prohibiting employees or agents
from seeking more favorable employment.
§ 179.7 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 decep-
tive 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 thetr
business, is an unfair trade practice.
PART 180—RAYON, NYLON, AND
SILK CONVERTING INDUSTRY
DEFINITIONS
Sec.
180.0 The industry and its products,
Grour I
180.1 Misrepresentation of industry prod-
ucts.
180.2 Misbranding.
180.3 False invoicing.
180.4 Deception as to origin.
180.5 Identification and disclosure of fiber
or material content.
180.6 Substitution of products,
180.7 Inducing breach of contract.
180.8 Commercial bribery.
180.9 Imitation of trade-marks, etc.
180.10 Defamation of competitors or dis-
paragement of their products.
180.11 Fictitious price lists,
180.12 Use of lottery schemes.
180.13 Prohibited discrimination in terms
of purchase and sale.
180.14 Unlawful combinations in restraint
of trade.
180.15 Consignment distribution or delty-
ery “on memorandum”.
180.16 Aiding or abetting use of unfair
trade practices, .
Group II
180.101 Saturday and Sunday closings.
180.102 Repudiation of contracts.
180.105 Use of written sales contracts.
180.104 Use of samples.
180.105 Arbitration of disputes.
180.106 Registration of original and novel
designs, .
180.107 Use of uniform standards for exam.
inatlon of finished piece goods.
122
Chapter I—Federal
AUTHORITY: The provisions of this Part
180 issued under secs. 6, 5, 88 Stat. 721, 719;
16 U.8.C. 46, 45, unless otherwise noted.
Source: The provisions of this Part 180 ap-
pear at 14 F.R. 624, Feb. 11, 1949, unless
otherwise noted.
DEFINITIONS
§ 180.0 The industry and its products.
(a) The products of the industry in-
clude textile fabrics known as broad
goods which are composed wholly or pre-
dominantly of one or more of the follow-
ing fibers: rayon, nylon, other man-made
textile fibers, or silk.
(b) Members of the industry are per-
sons and concerns who operate as con-
verters with respect to such fabrics,
including so-called integrated producers.
The business of the members is that of
acquiring, by purchase or production,
these fabrics in the grey, unfinished, or
semi-finished state; having the goods
dyed, printed, or finished in accordance
with their own specifications or those of
their customers; and marketing such
finished or processed fabrics to ‘“‘cutter-
ups,” to manufacturers of garments, or
of other products, and to the distributing
trades.
Group I
§ 180.1 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 advertise-
ment or otherwise, concerning the grade,
quality, freedom from defects or imper-
fections, quantity, use, size, material,
content, thread count, origin, shrinkage
properties, colorfastness, washahility,
production, manufacture, or distribu-
tion of any product of the industry or
concerning any component of such prod-
uct, or in any other material respect.
§ 180.2 Misbranding.
The false or deceptive labeling, mark-
ing, or branding of fabrics or products of
the industry in any manner which 1s
false, misleading, or deceptive in respect
to the grade, quality, freedom from de-
fects or imperfections, quantity, use, size,
material, content, thread count, origin,
shrinkage properties, colorfastness,
washabiilty, production, manufacture, or
distribution of such products, or in any
other material respect, is an unfair trade
practice.
Trade Commission § 180.4
§ 180.3 False invoicing.
Withholding from or inserting in in-
voices any statement 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, or the
consuming public, is an unfair trade
practice.
§ 180.4 Deception as to origin,
With respect to any fabrics of the fol-
lowing types: Fabrics which have been
woven or fabricated in a foreign country
and imported in the grey or other un-
finished state and dyed or finished in
the United States; and fabrics which
have been imported in the finished state
and dyed, redyed, or refinished in
the United States; it is an unfair trade
practice:
(a) To offer for sale, sell, or distribute
any such fabrics under marks, stamps,
brands, labeis, or representations which
have the capacity and tendency or effect
of misleading or deceiving purchasers,
prospective purchasers, or the consuming
public into the belief (1) that such fab-
rics were woven or fabricated in the
United States, when such is not the fact;
or (2) that they were dyed, finished, re-
dyed, or refinished elsewhere than in the
United States, when such is not true; or
(b) To offer for sale, sell, or distribute
any sucn fabrics without the same being
taarked, stamped, branded, or labeled so
as to indicate clearly and nondecep-
tively (1) the country of origin of the
fabrics, and (2) that such fabrics were
woven or fabricated in said country and
were dyed or finished or redyed or re-
finished in the United States, as the case
May be, the fallure, refusal, or omission
so to mark, stamp, brand, or label such
fabrics having the tendency and capacity
or result of thereby promoting, abetting,
or effectuating the marketing of such
products under conditions which are
misleading or deceptive to purchasers,
prospective purchasers, or the consuming
public.
Nore: Nothing in this sectlon shall be con-
strued as relieving any member of the in-
dustry or other party of the necessity of
complying with requirements of the customs.
laws or regulations, or other applicable pro-.
visions of law or regulations relating to the
marking of imported articles.
Cross REFERENCE: For regulations of the
U.S. Customs Service, see 19 CFR Chapter I..
123
§ 180.5
8180.5 Identification and disclosure of
fiber or material content.
(a) In the sale, offering for sale, or
distribution of industry products, it is an
unfair trade practice to misrepresent or
deceptively conceai the fiber or ma
content of any such product.
(b) Fabrics containing rayon, silk, or
linen shall be identified as to their fiber
and material content in labels, invoices,
and advertisements, in accordance with
the requirements of trade practice rules
heretofore promulgated by the Commis-
sion for the rayon industry, linen in-
dustry, and silk industry: Provided,
That products containing, purporting to
contain, or in any way represented as
containing, wool, reprocessed wool, or
reused wool, shali be labeled in accord-
ance with the requirements of the Wool
Products Labeling Act ef 1939 and the
rules and regulations issued thereunder.
Nore: A copy of the above-mentioned
trade practice rules, and of the Wool Prod-
ucts Labeling Act of 1939 and the rules and
regulations issued thereunder, may be ob-
tained from the Commission by any industry
member making request therefor.
§ 180.6 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
representations made prior to securing
the order, without the consent of the
purchasers to such substitutions and
with the tendency, capacity, or effect of
misleading or deceiving purchasers,
prospective purchasers, or the consum-
ing public, is an unfair trade practice.
§ 180.7 Inducing breach of contract.
Inducing or attempting to induce the
breach of existing lawful contracts be-
tween competitors and their customers
or their suppilers by any false or decep-
tive 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 business,
is an unfair trade practice.
§ 180.8 Commercial bribery.
It is an unfair trade practice for a
member of the industry directly or in-
directly 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
Title 16—Commercial Practices
representatives of competitors’ customers
or prospective customers, without the
knowledge of their employers or prin-
cipals, as an inducement to influence
their employers or principals to purchase
or contract to purchase products manu-
factured or sold by such industry member
or the maker of such gift or offer, or to
influence such employers or principals
to refrain from dealing in the products
of competitors or from dealing or con-
tracting to deal with competitors.
§ 180.9 Imitation of trade-marks, ete.
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, other exclu-
sively owned symbols or marks of iden-
tification of competitors, or the exclu-
sively owned patterns of competitors
which have not been directly, or by oper-
ation of law, dedicated to the public,
having the capacity, tendency, or effect
of misleading or deceiving purchasers,
prospective purchasers, or the consuming
public, is an unfair trade practice.
§ 180.10 Defamation of competitors or
disparagement of their products.
The defamation of competitors by
falsely 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
manufacture of the products of competi-
tors, or of their business methods, selling
prices, values, credit terms, pollcies,
services, or conditions of employment, is
an unfair trade practice.
§ 180°1L 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 de-
ceiving purchasers, prospective -pur-
chasers, suppliers, or the consuming pub-
lic, is an unfair trade practice.
8180.12 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.
124
Chapter !—Federal!
§180.13 Probibited discrimination in
terms of purchase and sale.’
(a) Prohibited discriminatory prices,
or discounts, rebates, refunds, credits,
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, directly or in-
directly, secretly or openly, any discount,
rebate, refund, credit, or other price dif-
ferentiai in the guise of transportation
costs or of samples or otherwise, where
such discount, rebate, refund, credit, or
price differential effects a discrimination
in price between different purchasers of
goods of like grade and quality, where
either or any of the purchases involved
therein are in commerce, and where the
effect thereof may be substantially to
lessen competition or tend to create a
monopoly in any line of commerce, 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 un-
der the jurisdiction of the United States;
(2) That nothing contained in this
paragraph shall prevent differentiais
which make only due allowance for dif-
ferences ln the cost of manufacture, sale,
or delivery resulting from the differing
methods or quantities in which such
commodities are to such purchasers sold
or delivered;
(3) That nothing contained 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 were made in re-
1As used throughout this section, the
word “commerce” means “trade or commerce
among the several States and with foreign
nations, or between the District of Colum-
bia or any Territory of the United States and
any State, Territory,.or foreign nation, or
between any insular possessions or other
Ppiaces 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 Territory or any insular
possession or other place under the juris-
diction of the United States.”
Trade Commission § 180.13
sponse to changing conditions affecting
either (i) 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.
(bo) Prohibited brokerage and commis-
sions. 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
goods, wares, or merchandise, either to
the other party to such transaction or to
an agent, representative, or other inter-
mediary 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 sn granted or paid.
(c) 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 facil-
ities 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 consideratlon ts
available on proportionally equal terms
to all other customers competing 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 agalnst another
purchaser or purchasers of a commodity
bought for resale, with or without proc-
essing, by contracting to furnish or
furnishing, or by contributing to the
furnishing of, any services or facilities
connected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not
125
$180.14
accorded to all purchasers on proportion-
ally 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 foregoing pro-
visions of this section.
(f) Prohibited 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 fabrics, bought from
such member of the industry for resale,
by contracting to furnish or furnishing
in connection therewith, upon terms not
accorded to all competing customer-pur-
chasers on proportionally equal terms,
the service or facility whereby such fa-
vored purchaser is accorded the privilege
of returning all or part of the fabric so
purchased and receiving therefor credit
or refund of purchase price: Provided,
however, Nothing in the provisions in
$§ 180.1 to 180.16 shall prohibit or be used
to prevent the return of merchandise by
purchaser, for credit or refund of pur-
chase price, when and because such mer-
chandise has been falsely or deceptively
labeied or represented, or when and be-
cause such merchandise is defective in
material, workmanship, or in other re-
spect is contrary to guarantee, warranty,
or purchase contract.
(g) Exemptions. The inhibitions of
this section shall not apply to purchases
of their supplies for their own use by
schools, colleges, universities, public li-
braries, churches, hospitals, and char-
{table institutions not operated for profit.
§ 180.14 Unlawful combinations in re-
straint of trade.
It is an unfair trade practice for a
member of the industry, or other person,
engaged in commerce:
(a) To use, directly or indirectly, any
form of threat, intimidation, or coercion
against any member of the industry cr
other person unlawtuily to fix, maintain,
or enhance prices, suppress competition,
or restrain trade; or
(b) To enter into or take part, di-
rectly or indirectly, in any agreement,
understanding, combination, conspiracy,
or concerted action with one or more
members of the industry, or with one or
more other persons, unlawfully to fix,
maintain, or enhance prices, suppress
competition, or restrain trade.
Title 16—Commercial Practices
§ 180.15 Consignment distribution or
delivery “on memorandum”,
(a) It is an unfair trade practice for
any member of the industry to employ
the practice of shipping goods on con-
signment, pretended consignment, or for
delivery ‘on memorandum”:
(I) When such practice is so used, or
the terms and conditions thereof so
varied or arranged, as to effectuate a
discrimination contrary to the provisions
of § 180.13; or
(2) When such consignment, pretend-
ed consignment, or delivery “on memo-
randum,” is used for the purpose and
with the effect of artificially clogging
trade outlets and unduly restricting com-
petitors’ use of said outlets in getting
their products to purchasers or con-
sumers through regular channels of
distribution, and thereby injuring, de-
stroying, or preventing competition,
tending to create a monopoly, or unrea-
sonably restraining trade.
(b) Nothing in this section shall be
construed as restricting or preventing
consignment shipping, or marketing ‘‘on
memorandum,” when carried out in
good faith and without illegal discrimi-
nation, suppression of competition, or
undue interference with competitors’
use of the usual channels of distribution.
§ 180.16 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
indirectly, to use or promote the use of
any unfair trade practice specified in
$$ 180.1 to 180.15.
Group II
§ 180.101 Saturday and Sunday clos-
« ings.
In the interest of the public and
of itself, the industry urges all members
of the industry to adhere to the practice
of not opening their sales offices on Sat-
urdays and Sundays for the transaction.
of business.
§ 180.102 Repudiation of contracts.
Lawful contracts are business obliga-.
tions which should be performed in letter
and in spirit. The repudiation of con-
tracts by sellers on a rising market or by
buyers on a declining market is con-
demned by the industry.
126
Chapter I—Federal Trade Commission
§ 180.103 Use of written sales contracts.
(a) In order to avoid ambiguity and
misunderstanding between buyers and
sellers, all purchases and sales of
products of the industry, exceeding one
piece, regardless of the total value
thereof, should be made by written con-
tract, signed by the buyer and seller.
Such written contract should set forth
the actual terms and conditions of the
sale involved.
(b) Wherever practicable, the deliv-
ery of all merchandise of any quantity
should be made against a written receipt
signed by the purchaser, or a qualified
agent or employee of the purchaser.
(c}) The provisions of this section shall
not be construed as sanctioning or ap-
proving any agreement among competi-
tors or any planned common course of
action among competitors to agree upon
or to fix, specify, or determine the prices,
discounts, terms, or conditions of sale to
be covered in any sales contract or trans-
action, but these shall be open to indi-
vidual negotiation hetween the seller and
buyer, subject to the requirements of
$$ 180.1 to 18C.16 and applicable provi-
sions of law.
§ 180.104 Use of samples.
The industry disapproves the giving of
samples without charge except in suffi-
cient quantity necessary to acquaint
purchasers or prospective purchasers
with the grade or quality of the product
offered for sale. However, the furnish-
ing of any samples shall not be carried
out in a manner involving discrimina-
tion contrary to the provisions of
$ 180.13.
§ 180.105 Arbitration of disputes,
The industry approves and recom-
mends the use of commercial arbitration
for the speedy and efficient disposition of
disputes arising out of the sale, process-
tng, or distribution of the industry’s
fabrics.
§ 180.106 Registration of original and
novel designs.
The industry recommends that all
members should register their original
and novel designs, not directly or by
operation of law dedicated to the public,
with an accepted industry design regis-
tration bureau to the end that unauthor-
ized copying of designs and the resultant
confusion and misunderstanding be
eliminated and appropriate information
§ 180.107
as to designs in use be fully available to
the industry.
§ 180.107 Use of uniform standards for
examination of finished piece goods.
For the visual examination of finished
niece goods, the industry recommends
that uniform standards, which are equi-
table as between buyer and seller and fair
to the trade and purchasing public, be
used in the settiement of disputes con-
cerning the quality of the industry's
goods. Nothing in this section, however,
shall be construed as warranting classifi-
cation of any fabric of the industry as a
“first” when not fully qualified for such
designation; and in this connection in-
dustry members recognize it as their
obligation to in no wise contribute to
any misrepresentation or deception as
to gerade, quality, or otherwise, in the
further marketing of the fabric or prod-
ucts made therefrom.
PART 181—HANDKERCHIEF
INDUSTRY
Sec. .
181.0 Definition.
Group I
181.1 Fiber identification.
181.2 Fictitious prices.
181.3 Exclusive dealing arrangements to
exclude sale of competitors’ prod-
ucts.
1814 Selling below cost.
181.5 Palse invoicing.
181.6 Inducing breach of contract.
181.7 Defamation of competitors or dis-
paragement of their products.
1818 Misrepresentation of industry prod.
ucts.
181.9 Misrepresentation of business sta-
tus.
181.10 Commercial bribery.
181.11 Consignment distribution,
181.12 Unlawful combination in restraint
of trade.
181.18 Use of “logs leaders.”
181.14 Prohibited discrimination.
181.15 Deceptive labeling or marking.
181.16 Disclosure in respects to “seconds.”
181.17 Misrepresentation of men’s hand-
kerchiefs in respect to size.
181.18 Use of term “hand-rolled.”
181.19 Imitation of trade-marks, trade
names, etc,
181.20 Discriminatory returns,
181.21 Tie-in sales.
Grovur II
181.101 Record keeping.
181.102 Forms of contract.
181.108 Repudiation of contracts,
181.104 Dissemination of credit informa-
tion.
181.108 Recording of trade-marks.
127