Legal Definitions - fair-trade law

A fair-trade law is a law created by a state to protect and enforce fair-trade agreements. These agreements are made between manufacturers and retailers to set a minimum price for a product. This helps to prevent retailers from selling products at a lower price than the manufacturer intended, which can hurt the manufacturer's profits.

For example, if a manufacturer sets a minimum price of $10 for a product, a fair-trade agreement would require retailers to sell the product for at least $10. This ensures that the manufacturer can make a profit and continue to produce the product.

However, fair-trade laws can sometimes violate the Sherman Antitrust Act, which is a federal law that prohibits anti-competitive behavior. This means that some states have repealed their fair-trade laws to avoid violating federal law.

Overall, fair-trade laws are designed to protect manufacturers and ensure that they can make a fair profit from their products. While they may not be as common as they once were, they can still be an important tool for protecting businesses and consumers.