Saw And Blade Service Industry

16 CFR Part 88 · Trade practice rules · in the Code of Federal Regulations 1938-1977 (16 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1977 CFR · Earliest edition: 1938 CFR

Text (1977 edition, OCR)

Chapter I—Federal

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.

Ezample No. 2. In order to make a sale of
a@ large quantity of products to a particular
buyer who will not pay the seller’s going
price, the seller and his broker agree that the
usual brokerage fee will be reduced and that
the price to such buyer will be less then
otherwise by an amount refiecting all or part
of the brokerage reduction. The sale is made
to such buyer at the reduced price. The
seller, tho 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 is in all respects subject to such
corporation’s supervision and control. In
connection with negotiation of purchases of
goods and the handling 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 principal 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 seller-principal at a price established
by the selier. The seller delivers an invoice
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 collects 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-principal it is the
broker’s responsibility to provide confirma-
tion and memoranda 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 a packer and shipper
of fresh fruits and vegetables has an inade-
quate supply of a particular commodity to

90-058-—-77—-—-34

Trade Commission Part 88

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 (a)
of this section.

Example No. 3. An industry member sells
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 fess selling 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 88—SAW AND BLADE
SERVICE INDUSTRY

Group I

Sec.

88.1 Inducing breach of contract.

88.2 Defamation of competitors or dispar-
agement of their products or serv-
ice.

88.3 Procurement of competitors’ confi-
dential information.

88.4 Prejudicing competitors’ relation-
ships with their agents.

88.5 Enticing away employees of competi-
tors.

83.6 Commercial bribery.

88.7 Deception of customers of competi-
tors as to identity.

88.8 Falsification of records.

88.9 Furnishing of property on condition
exclusive right to service same.

88.10 Transactions below cost.

88.11 False guarantees.

88.12 Substitution of products.

88.13 Coercing purchase of one product as
& prerequlsite to the purchase of
other products.

88.1 False or misleading price quotations.

88.16 False advertising.

88.16 Misbranding.

88.17 Discrimination.

88.1 Aiding or abetting use of unfair
trade practices.

Group II

88.101 Trial period.

88.102 Use of competitor’s equipment.

88.103 Arbitration.

88.104 Maintenance of accurate cost ac-
counting systems.

88.105 Dissemination of credit information.

COMMITTEE ON TRADE PRACTICES

88.201. Industry committee.

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

471


§ 88.1

Source: Trade practice rules, Saw and
Blade Service Industry, FIC, Dec. 27, 1946,
uniess otherwise noted.

Grovur I
§ 88.1 Inducing breach of contract.

It is an unfair trade practice to induce
or attempt to induce the breach of exist-
ing lawful contracts between competitors
and their customers, or their suppliers,
by any false or deceptive means whatso-
ever, or to interfere with or obstruct the
performance of any such contractual
duties or services by any such means,
with the purpose and effect of unduly
hampering, injuring, or prejudicing com-
petitors in their business.

§ 88.2 Defamation of competitors or
disparagement of their products or
service.

The defamation of competitors by
falsely imputing to them dishonorable
conduct, inability to perform contracts,
questionable credit standing or integrity,
or by other false representations, or the
false disparagement of the grade, qual-
ity, durability, workmanship, quantity,
composition, construction, specifications,
make, type, size, origin, appearance,
value, or performance of their products,
or of the nature, quality, or extent of the
service furnished by them, or of their
prices, credit terms, or contract condi-
tions, or of their business methods, prac-
tices, or policies, is an unfair trade prac-
tice.

§ 88.3. Procurement of competitors’
confidential information.

It is an unfair trade practice for any
member of the industry to obtain in-
formation concerning the business of a
competitor by bribery of an employee or
agent of such competitor, by false or mis-
leading statements or representations,
by the impersonation of one in authority,
or by any other unfair means, and to use
the information so obtained in such
manner as to injury sald competitor in
his business or to suppress competition
or unreasonably restrain trade.

§ 88.4 Prejudicing competitors’
tionships witb their agents.

It is an unfair trade practice for any
member of the industry to induce, or at~
tempt to induce, an agent of a com-
petitor to become the industry member’s
agent also, with the understanding or
agreement between such industry mem-~-
ber and agent that, though retaining his

4

rela-

Title 16—Commercial Practices

agency relationship with such competti-
tor, such agent is not to continue to
promote in good faith the business of
such competitor.

§ 88.5 Enticing away employees of

competitors.

Willfully enticing away the employees
of competitors with the purpose and ef-
fect of thereby unduly hampering or
injuring competitors in their business
and destroying or substantially lessen-
ing competition is an unfair trade prac-
tice: Provided, however, That nothing in
this section shall be construed as pro-
hibiting employees from obtaining more
favorable employment.

§ 88.6 Commercial bribery.

It is an unfair trade practice for any
member of the industry, directly or in-
directly, to give or permit to be given, or
offer to give, money or anything of value
to agents, employees, or representatives
of customers or prospective customers, or
to agents, employees, or representatives
of competitors’ customers or prospective
customers, without the knowledge of
their employers or principals, as an in-
ducement to influence their employers
or principals to purchase or contract for
the supplying or servicing of saws, saw
frames, blades, meat-chopper plates,
knives, or other articles from the maker
of such gift or offer, or to influence such
employers or principals to refrain from
dealing or contracting to deal with com-
petitors.

§ 88.7 Deception of customers of com-
petitors as to identity.

It fs an unfair trade practice for any
member of the industry, his agent or
representative, to feign his identity to a
customer of a competitor as being that
of an agent or representative of such
competitor and thereby obtain possession
of money or property belonging to a com-
petitor, or to obtain any advantage with
respect to such competitor by reason of
such deception. The effecting of a sub-
stitution of the member's service or sup-
plies for that of his competitor’s service
or supplies by such deceptive means is
an unfair trade practice under this
section.

§ 88.8 Falsification of records.

The practice of withholding from or
inserting tn a receipt left with customers
statements which make the receipt a
false and deceptive record, wholly or in

2


Chapter I—Federal

part, of the transaction which said re-
ceipt covers, is an unfair trade practice,

§ 88.9 Furnishing of property on con-
dition of exclusive right to service
same.

(a) It is an unfair trade practice for
any member of the industry to sell, lease,
loan, or otherwise furnish to any cus-
tomer or prospective customer, any saw
frame, grinding or cutting machine,
saws, knives, blades, or plates, or any
other article of property, on the condi-
tion, agreement, or understanding that
such customer shali not use, or contract
for the use of, machinery, supplies, or
other articles of property of a competitor
or competitors of such industry membor,
where the effect of such condition, agree-
ment, or understanding may be to sub-
stantially lessen competition or tend to
create a monopoly in any line of
commerce.

(b) The inhibitions of this section
shall apply though the furnishing of
property by industry member upon such
condition be without charge to the cus-
tomer.

§ 88.10 Transactions below cost.

(a) The practice of selling or supplying
equipment and service below the seller’s
or supplier’s cost, when pursued with
wrongful intent of thereby injuring a
competitor and where the effect of such
practice is to unreasonably restrain
trade, tend to create a monopoly, or sub-
atantially lessen competition, is an unfair
trade practice.

(b) This section is not to be construed
as prohibiting all transactions below cost,
but only such selling or supplying below
the selier’s or lender’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 substantially lessening
competition.

(c) The costs referred to in this section
are actual costs of the respective seller or
supplier and not some other figure or
average costs in the industry determined
by an industry cost survey or otherwise.

§ 88.11 False guarantees.

The making of any guarantee or pur-
ported guarantee respecting the efficacy,
durability, or quality of an industry
product or service which has the capacity
and tendency or effect of deceiving cus-
tomers or prospective customers, or
which is impossible for the guarantor to

Trade Commission § 88.16
assure because of contingencies over
which he has no control, or which is not
made in good falth, is an unfair trade
practice.

§ 88.12 Substitution of products.

The practices of shipping or delivering
products which do not conform to sam-
Ples submitted, to specifications upon
which the sale or loan ts consummated,
or to representations made prior to se-
curing the order or contract, without the
consent of the purchasers or borrowers
to such substitutions, and with the tend-
ency and capacity or effect of misleading
or deceiving purchasers, borrowers, pro-
spective purchasers or borrowers, is an
unfair trade praotice.

§ 88.13 Coercing purchase of one
product as a prerequisite to the pure
chase of other products.

The practice of coercing the purchase.
or loan of one or more products as a
prerequisite to the purchase or loan of
one or more other products, where the
effect may be to substantially lessen com-
petition or tend to create a monopoly or
to unreasonably restrain trade, ts an un-
fair trade practice.

§ 88.14 False and misleading price quo-
tations.

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations, price lists, or
terms of sale or loan, with the capac-
ity and tendency or effect of thereby
misleading or deceiving the purchaser
or borrower, is an unfair trade practice.

§ 88.15 False advertising.

Making, or causing to be made or pub-
lished, any false, misleading, or deceptive
statement or representation, by way of
advertisement or otherwise, concerning
the grade, quallty, quantity, substance,
character, size, material, content, origin,
preparation, manufacture, or distribu-
tion of any industry product, or in any
other material respect, is an unfair trade
practice.

§ 88.16 Misbranding.

It is an unfair trade practice to falsely
or deceptively mark, brand, or label any
products of the industry with any word,
phrase, mark, name, label, design, device,
or other representation with respect to
the size, quality, durability, finish, mate-
rial, or construction of such products or
of any of the component parts thereof.

473


§ 88.17

§ 88.17 Discrimination.

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, 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, secretly or
openly, directly or indirectly, any rebate,
refund, discount, credit, dating of com-
mencement of service, or other form of
price differential, whether in the form of
free service or otherwise, where such re-
bate, refund, discount, credit, dating of
commencement of service, or other form
of price differential effects a discrimina-
tion in price between different purchasers
or customers of goods or like grade and
quality, where either or any of the trans-
actions, involved therein are in com-
merce, 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: Pro-
vided, however, (1) That the goods in-
volved in any such transaction are sold
or supplied for use, consumption, or re-
sale within any place under the juris-
diction of the United States;

(2) That nothing contained in this
section shall prevent differential which
make only due allowance for differences
in cost resulting from the differing
methods or quantities in which such
commodities are to such purchasers sold,
supplied, or delivered;

(3) That nothing eontained in this
section shall prevent persons engaged in
selling or supplying goods, wares, or mer-
chandise in commerce from selecting
their own customers in bona fide transac-
tions and not in restraint of trade;

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

(b) Prohibited brokeage and commis-
ston. It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-

Title 16——Commercial Practices

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, purchase, or
supplying of goods, wares, or werchan~
dise, either to the other party to such
transaction or to an agent, representa-
tive, or other intermediary therein where
such intermediary 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.

(ec) Including 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 forego-

ing provisions of this section.
(d) Purchases by or loans to schools,
colleges, universities, hospitals, and

charitable institutions not operated for
profit. The Robinson-Patman Antidis-
crimination Act and the application
thereunder of this section are subject to
the limitation expressed in the amend-
ment to such Robinson-Patman Antidis-~
crimination Act, which amendment was
approved May 26, 1938, and reads as
follows:

Be tt enacted by the Senate and House of
Representatives of the Untted States of
America in Congress assembled, That noth-
tng in the Act approved June 19, 1963 (Pu-
plic, Numbered 692, Seventy-fourth Congress,
second session), Known as the Robinson-Pat-
man Antidiscrimination Act, shall apply to
purchases of their supplies for their own use
by schools, colleges, universities, public H-
braries, churches, hospitals, and charitable
institutions not operated for profit.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 8, 4,
49 Stat. 1527, 1528, ch. 283, 52 Stat. 446;
15 U.8.C. 18, 18a, 18b, 18¢, 21a)

8 88.18 Aiding or abetting use of unfair
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 the
regulations of this part.

Group II
$ 88.101 Trial period.

The industry expresses its approval of
the trade custom of granting such lim-

474.


Chapter I—Federal

ited trial period as 1s necessary to ac-
quaint new customers with a product or
present customers with a new type of
product. However, the industry con-
demns the practice of hampering a com-
petitor in his relations with a customer
by furnishing equipment to such cus-
tomer free of charge for a period of time
in excess of that reasonably required for
a fair trial thereof under the subterfuge
of granting a trial period.

Nore: § 88.101 is also subject to the limita-
tion that the furnishing of any equipment
shall not be accompished in such manner
as to offect a discrimination contrary to
§ 88.17.

§ 88.102 Use of competitor’s equip-
ment.

In the competition attendant upon
the exchanging, lending, selling, and
supplying of saw frames, blades, meat-
chopper plates, and knives, the said
articles are frequently lost and come
into the hands of a competitor or
competitors of the owner who fails not
only to disclose the fact of his find, but
actually converts the said saw frames,
blades, meat-chopper plates, and knives
to his own use. This practice is strongly
condemned by the industry.

§ 88.103 Arbitration.

The industry approves the practice of
handling business disputes between
members of the industry and their cus-
tomers in a fair and reasonable manner,
coupled with a spirit of moderation and
good will, and every effort should be
made by the disputants themselves to
compose their differences. If unable to
do so they shouid, if possible, submit
these disputes to arbitration.

§ 88.104 Maintenance of accurate cost
accounting system.

It is the judgment of the industry that
each member should install an accurate
and proper method of determining his
cost.

§ 88.105 Dissemination of credit in-

' formation.

The industry records its approval of
distributing to its members information
covering delinquent and slow accounts
insofar as this may be lawfully done.

COMMITTEE ON TRADE PRACTICES
§ 88.201 Industry committee.

The provisions of § 16.1 of this sub-
chapter shall be applicable to an indus-

Trade Commission § 92.0

try committee established under this
part.
[21 F.R. 1174, Feb. 21, 1956]

PART 92—WOODWORKING
MACHINERY INDUSTRY

Sec.
92.0 The industry and its products defined.
Group I

92.1 Misrepresentation (general).

92.2 Misrepresentation as to character of
business.

92.3  Misrepresenting products as conform-
ing to standard.

924 Guarantees, warranties, etc.

92.6 Deception as to rebuilt or second-hand
products.

92.6 Substitution of products.

92.7 Deceptive use or imitation or simula-=
tion of trade or corporate names,
trade-marks, etc.

92.8 Deceptive invoicing, etc.

92.9 Defamation of competitors or false
disparagement of their products.

92.190 Inducing breach of contract.

92.11 Enticing away employees of competi-
tors,

93.12 Commerciat bribery.

92.18 Procurement of competitors’ confi-
dential information.

92.14 Tie-in sales—coercing purchase of
one product as @ prerequisite to the
purchase of cther products.

92.16 Unfair threats of infringement sults.

92.16 Consignment distribution.

92.17 Prohibited forms of trade restraints
(unlawful price fixing, etc.).

92.18 Prohibited exclusive deals.

92.19 Prohibited sales below cost.

92.20 Prohibited discrimination.

92.21 Aiding or abetting use of unfair trade
practices.

AutHoriry: Secs. 6, 5, 38 Stat. 721, 719; 15
U.8.C. 46, 45, unless otherwise noted.

Sougce: 25 FR 5335, June 24, 1960; 25 FR
6184, June 30, 1960, unless otherwise noted.

§ 92.0 ‘The industry and its products de-

(a) Products of the industry consist
of all types of new, rebuilt, or used
power-driven machinery which are de-
designed for use in the commercial fabri-
cation of logs and wood into finished or
semi-finished products, and which are of
such size, weight, or type as not to be
easily and conveniently transported by
hand; and parts and accessories for such
products.

(b) Members of the industry are per-
sons, firms, corporations, and organiza-
tions engaged in the manufacture, sale,
offering for sale, lease, or distribution of
such products.

475