Legal Question in Business Law in Illinois

Is is legal for a company to buy product X at $50 and advertise sale $75 have stock of 100 units. Then occurs a shortage and price to comapny is now $100 so they order another 100 units. Then to capitalize on inital stock they raise the price on those units "cost avg" to $125, therfore, making a substnatial (possibly unfair) margin on the inital stock of 100 units purchased at just $50 but sold at $125. Is there any laws on resellers, shortages, purchasing and resale that pertain to situation similar to this? Thanks!

Also, in terms of salespeople who sell product X at $75 then have the company change price to $125 and take the difference from them. Are there any laws on treatment of salespersons comissions? Thanks!


Asked on 10/28/11, 8:37 am

1 Answer from Attorneys
Stephen Messutta

Depends on the "product". Generally the only laws are those of supply and demand unless there is some public regulation of the pricing (such as utility rates....), or unless the manufacturer has a contract that prohibits true "resellers" from jacking up prices (normally price "fixing" is not allowed unless we're talking true distributors and/or resellers), or it's otherwise illegal (such as "ticket scalping"). However, if the commission structure is based on price, then whatever the price is should be the basis for the commission subject to whatever limitations there may be in the commission agreement.

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Answered on 11/03/11, 9:44 am


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