Q2: Justin Manufacturing Company sells high-fashion clothing under the prestigious "Justin" label. The company has a firm policy that it will not deal with any company that sells below its suggested retail price. Justin is informed by one of its customers, XYZ, that its competitor, Duplex, is selling the "Justin" line at a great discount. Justin now demands that Duplex comply with the agreement to not sell the "Justin" line below the suggested retail price. Discuss the implications of this situation.
Q1: Prior to December 20, 1998, Basett Inc. was a publicly traded company engaged in the business of manufacturing chemical refractories for the steel industry. Beginning in September 1996, Combination Engineering, Inc., and Basett began discussions concerning the possibility of a merger of the two companies. Nevertheless, during 1997 and 1998, Basett made three public statements denying that it was engaged in merger negotiations. On December 18, 1998, Basett asked the New York Stock Exchange to suspend trading in its shares and issued a statement saying that it had been "approached" by another company concerning a merger. On December 20, Basett publicly announced its approval of Combination's offer for all its outstanding shares. Plaintiffs were former owners of Basett stock who sold their shares after Basett publicly denied that it was engaged in merger negotiations. Plaintiffs brought a class action suit against Basett and its directors, alleging that they had released false or misleading information in violation of Section 10(b) of the 1934 Act and in violation of Rule 10b-5. Plaintiffs claimed that they were injured by selling their shares at prices which were artificially depressed as a consequence of Basett's misleading public statements. The Court of Appeals held that the plaintiffs had carried their burden of proof. Defendants appealed, claiming that the plaintiffs had not proven that they had, in fact, relied upon the misleading statements in selling their stock. Decision?
1 -- The company is selling clothing under their brand label. They have a policy that they won't deal with companies who sell below a certain price. The company learns that a customer is doing so - selling below the stated price. What are the implications to this scenario?
There are a few different factors that we have to consider in this case. The main element is a contract. It is Justin's policy to sell to only customers that will sell their line at a stated price. Is there a contract in place, either orally or written, stating these terms? This is the main question that we would want to address. We do not know the full context of the scenario. We see suggested prices from manufacturers frequently. Auto dealers always ...
This solution discusses both business law cases presented. The legal elements of each case are discussed along with the outcome to each case. The retail clothing line is explained, which involves several legal elements that include laws governing sales and contracts. The merger case (Basset) is then explained, which involves the securities acts and a shareholder's burden of proof.