Was the US Supreme Court right to allow manufacturers and distributors to create resale price agreements?

Yes

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by Hal Lillywhite

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I hate such agreements. I think a company is dumb to put them in place. However the issue is not my likes and dislikes, nor the wisdom of companies that do it. The issue is one of law and the right of business people to decide how they conduct their business. I believe they have the right to use contract law just like anyone else. That includes setting conditions to be included in the contracts.

This is part of freedom. I have a right to sell or not sell anything I own. If I chose to sell I have a right to set the price and other conditions. For example, I might sell my home and include a provision in the contract that for the next five years it will be used as a residence, not a business. The buyer has the option to buy and sign the contract or not to buy. He even has the option of negotiating to see if he can get me to change my mind. He does not have the option to tell me I must sell on his terms.

Similarly, the retailers who resell high-end merchandise have the right to accept or reject the available contract. They can negotiate if they wish. They even have the right to organize a boycott if they think the terms are too onerous. If enough boycott, the manufacturer will be forced to agree to their conditions. However government should not dictate terms of business contracts. Big Brother does not know best.

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