Buns Bakery sold bread and cakes to Peggy's Grocery under an agreement whereby Peggy would not retail the goods for less than the price printed on the wrapper of the products. By their agreement, Buns Bakery would provide Peggy's Grocery with an extra 5% discount at the end of each month, based upon the volume sold at the stipulated retail price during the month. The agreement is lawful because any sale of goods for a price less than the price printed on the package would mean that Buns Bakery was falsely advertising the price of the product.

Question

Quizplus · Accepted Answer

The agreement is likely unlawful as it constitutes resale price maintenance, which is generally prohibited under antitrust laws because it restricts the retailer's ability to set their own prices.

Buns Bakery Sold Bread and Cakes to Peggy's Grocery Under