Legal Question in Business Law in Michigan

Re: Price Fixing

As previously stated by another LawGuru member, the circumstances could give rise to a claim of tortious interference with contractual relations, if it can be shown that the competitor intended to harm your business and that there is no legitimate business reason for the ultimatum. The law will not prevent honest competition, but it provides relief in the event that the actions are unlawful or for an improper purpose. What constitutes an improper purpose depends on the circumstances and must be determined by a judge or jury.

The action might be unlawful, if it can be found to be prohibited by state or federal law. One source is the Michigan Antitrust Reform Act, which states, at MCLA Section 445.772:

"A contract, combination, or conspiracy between 2 or more persons in restraint of, or to monopolize, trade or commerce in a relevant market is unlawful."

An agreement between a supplier and a customer to raise prices to another customer to adversely affect the other customer could be a violation of the Act and/or of federal laws which bar illegal restraints of trade. If it is illegal, the State of Michigan Attorney General or the U.S. Attorney General would have authority to prosecute the offending parties.

This response is not intended as legal advice. Your rights and obligations will depend upon the particular facts and circumstances affecting this matter. You should consult an attorney in your area to discuss all of the relevant facts and circumstances. No attorney/client relationship is created as a result of this response. I may be contacted at 248.788.8225.

Re: Price Fixing

There a several different potential causes of action including intentional interference with your contractual relationship with the supplier and illegal market restraints, but the facts would have to be examined in much greater detail than provided in your post. You should gather all of your documentation relating to the difference in price charged before and after the alleged threat by your competitor. Additionally, you would need someone to document the statement by your competitor re: threat to terminate the contract. If you are relying on tetimony from supplier, they probably won't support your claim as they have a business relationship w/ your competitor.