Legal Question in Business Law in Florida

Company A purchases a well known brand name product from distressed Authorized Retailers at discounted prices and resells the product online at 10% below the Manufacturers Suggested Retail Price (MSRP). The Manufacturer's Terms and Conditions state that Authorized Retailers cannot sell their product to anyone except consumers from their authorized location. The Manufacturer does not know which Authorized Retailers are selling their product to Company A.

What legal action can the Manufacturer take against Company A?


Asked on 10/31/09, 9:30 pm

1 Answer from Attorneys
Sarah Grosse Sarah Grosse, Esquire

Technically, nothing. However, manufacturers get very upset when their merchandise is sold and resold outside of authorized channels, and they will invent the cause of action of "diversion" -- to the bane of their in-house counsel's existence. In-house counsel (the company's full-time lawyer) will find some way to have a cause of action against you, knowing full well that "diversion" is not a legal cause of action. But, in an attempt at self-preservation, she or he will send you cease and desist letters and may sue you under theories of trademark or copyright infringement and/or unfair competition. I say this like I know from first-hand experience, because I do.

If you get a C&D letter, please have a knowledgeable attorney respond for you.

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Answered on 11/05/09, 9:57 pm


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