Scrap Iron And Steel Industry
16 CFR Part 76 · Trade practice rules · in the Code of Federal Regulations 1938-1976 (14 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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)
§ 76.1
allowance is made directly by check, by de-
duction by the buyer from invoice price be-
fore remitting payment therefor, by deduc-
tion from the sales price by the seller, or
otherwise.
In other transactions, however, the above-
described buyer may function, not as a buyer,
but as a bona fide broker for the same seller,
negotiate for him a sale of goods to another
party in accord with the seller’s instructions
end authorization and lawfully receive a
brokerage fee for such service.
Example No, 2. In order to make a gale of
a@ large quantity of products to a particular
buyer who will not pay the seller’s going
price, the selier and his broker agree that the
usual brokerage fee will be reduced and that
the price to such buyer wiil be less than
otherwise by an amount reflecting all or part
of the brokerage reduction. The sale is made
to such buyer at the reduced price. The
seller, the broker and the buyer have violated
paragraph (a) of this section.
Example No. 3. A broker is in fact the
purchasing agent for a large buyer corpora-
tion and he 1s in ali respects subject to such
corporation’s supervision and contro!. In
connection with negotiation of purchases of
goods and the handilng thereof on behalf
of the buyer corporation, the broker per-
forms certain incidental services for the sel-
lers involved and is paid brokerage fees by
the sellers for such services. The payment
of the brokerage fees by the sellers and the
receipt and acceptance thereof by the broker
are violations of paragraph (a) of this sec-
tion. A broker may receive compensation for
negotiating a valid and binding sales con-
tract only from his princtpal for whom he
has negotiated such contract.
(g) The following are examples of
practices which are not violative of para-
graph (a) of this section.
Example No. 1. A broker negotiates a valid
and binding contract for the sale to several
buyers of fresh fruits or vegetables on behalf
of his seiler-princlpal at a price established
by the selier. The seller delivers an involce
and/or manifest to the broker showing the
name of the broker as “broker” and itemizing
the list of the merchandise together with the
price of each item. The names of the buyers
are not listed. As a service to his seller-prin-
cipal, the broker bills and coliects from the
buyers the amount charged by the seller,
remitting the total amount collected, less
brokerage, together with a memorandum of
sale identifying the buyers. There is no viola-
tion of paragraph (a) of this section in this
example. In such a situation wherein the
names of the buyers are not initially disclosed
by the broker to his seller-principai it is the
broker’s responsibility to provide confirma-
tion and memorande as will clearly establish
his role as a broker, and it is the seller’s re-
sponsibility to ascertain that the broker is
not the buyer.
Example No, 2, An industry member who
is regularly engaged as ® packer and shipper
Title 16—-Commercial Practices
of fresh fruits and vegetabies has an inade-
quate supply of a particular commodity to
meet his needs at a particular time. He pur-
chases the necessary quantity to meet such
needs from another regularly engaged packer-
shipper operating at the same level of distri-
bution. By prearrangement, the purchaser is
allowed an inter-packing house discount.
Such practice does not violate paragraph (8)
of this section.
Example No. 3. An industry member seils
industry products through his broker to
some purchasers and direct, without the
services of his broker, to other purchasers.
In doing so he charges lower prices to some
customers because in making sales to them
he incurs less seliing and delivery expense
other than savings in brokerage fees and
commissions than he incurs in selling or de-
livering products to the other customers.
Nore: A price differential which is not vio-
lative of paragraph (a) of this section may
nevertheless be violative of § 74.1.
(Rule 2]
PART 76—SCRAP IRON AND STEEL
INDUSTRY
Group I
Sec.
76.1
16.2
76.3
16.4
Substitution.
Defamation of competitors.
Inducing breach of contract.
Commercial bribery.
Group IT
False billing.
Credit for overweight.
Repudiation of contracts.
False invoicing.
Arbitration.
Cost accounting.
COMMITTEE ON TRADE PRACTICES
76.201 Industry committee.
AvTHoRITY: The provisions of this Part 76
Issued under secs. 6(g), 5, 38 Stat, 722, 719;
15 U.S.C. 46, 45, unless otherwise noted.
Source: The provisions of this Part 76
contained in trade practice rules, Scrap Iron
and Steel Industry, PTC, May 20, 1932, unless
otherwise. noted.
Group I
§ 76.1 Substitution.
The practice of delivering inferior
products against contracts to supply
scrap iron and steel according to certain
specifications by so arranging the ship-
ments in the cars that the inferior prod-
ucts will not be readily discovered on
surface inspection, without the consent
of the consumer and/or purchasers to
such substitutions and with the effect of
recelving or misleading consumers
and/or purchasers, is an unfair trade
practice.
76.101
76.102
76.103
76.104
76.105
76.106
492
Chapter ![—Federal
§ 76.2 Defamation of competitors.
The defamation of competitors to
falsely imputlng 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 goods, with the tendency and capac-
ity to mislead or deceive purchasers or
prospective purchasers, is an unfair trade
practice.
§ 76.3. Inducing breach of contract.
Maliciously inducing or attempting to
induce the breach of existing contracts
between competitors and their customers
by any false or deceptive means whatso-
ever, 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 ham-
pering, injuring, or embarrassing com-
petitors in their businesses, is an unfair
trade practice.
§ 76.4 Commercial bribery.
Directly or indirectly to give or permit
to be given or offer to give money or any-
thing of value to agents, employees, or
representatives of customers or prospec-
tive 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 industry products
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 is an unfair
trade practice.
Group II
§ 76.101 False billing.
The presentation or use of fictitious
bills of lading or other evidence of billing,
for the purpose of securing advances of
money or other valuable consideration, is
condemned by the industry.
§ 76.102 Credit for overweight.
Failure of dealers or brokers to give
credit for overweight, where credit for
overweights has been passed by the con-
sumer, is hereby condemned.
§ 76.103 Repudiation of contracts.
Contracts, either written or oral, are
business obligations which should be
performed in letter and spirit. The re-
pudiation of contracts by sellers on a ris-
ing market, or by buyers on a declining
Trade Commission § 76.201
market, 1s equally reprehensible, and 1s
condemned by the industry.
§ 76.104 False invoicing.
Withholding from or inserting in the
invoice statements which make the in-
voice a false record, wholly or in part, of
the transaction represented on the face
thereof, is condemned by the industry.
§ 76.105 Arbitration.
The industry approves the practice of
handling disputes in a fair and reason-
able manner, coupled with a spirit of
moderation and good will, and every ef-
fort should be made by the disputants
themselves to arrive at an agreement. If
unable to do so they should agree, if
possible, upon arbitration under some
one of the prevailing codes.
§ 76.106 Cost accounting.
It is the Judgment of the industry that
each member should install a proper and
accurate method for determining his
cost.
COMMITTEE ON TRADE PRACTICES
§ 76.201 Tudustry committee.
The provisions of § 16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.
{21 F.R. 1174, Feb. 21, 1956}
PART 84—WARM AIR FURNACE
INDUSTRY
Group I
Sec.
84.1 Inducing breach of contract.
84.2 Commercial bribery.
84.3 False marking or branding.
84.5 Sales below cost.
84.6 Defamation of competitors.
84.7 Misrepresentation in general.
84.8 Faise representations.
84.9 Imitation of trade-marks, trade
names, etc.
84.11 Fictitious prices.
Group IT
84.101 False invoicing.
84.102 Special quantity prices.
84.103 Publication of price Hsts and terms
of sale.
84.104 Incomplete coverage of warranties,
etc.
AvuTHoriTy: Secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46, 45, unless otherwise noted.
Source: Trade practice rules, Warm Air
Furnace Industry, FTC, Nov. 18, 1932, unless
otherwise noted.
493