Definition

1. Noun:
   • A commercial agreement between a manufacturer and its retailers: A "fair-trade agreement" is a specific type of contract where the manufacturer of a branded product and its retail sellers agree that the product will be sold at or above a minimum price set by the manufacturer.

Usage

• This term is used in the context of commerce, retail, and antitrust law. It specifically refers to a now-illegal practice of price maintenance. The usage is formal and historical.
• Example:

Advanced Usage

• The term is often discussed in legal and economic contexts concerning competition policy. Such agreements were designed to protect brand image and small retailers from price-cutting by large chains but were ultimately deemed anti-competitive.
• Example:

Variants and Related Words

• Fair-trade (adjective, distinct meaning): Refers to an international social movement and labeling system that ensures producers in developing countries get a fair price for their goods (e.g., fair-trade coffee).
• Resale price maintenance: A more general legal term for the practice of a supplier controlling the resale price of its product, which encompasses what was historically called a fair-trade agreement.

Synonyms

• Resale price maintenance agreement: A direct synonym describing the same practice.
• Vertical price-fixing agreement: A more technical legal synonym emphasizing the anti-competitive nature of the agreement between different levels of the supply chain (manufacturer and retailer).

Related Phrases

• To enforce a fair-trade agreement: The action taken by a manufacturer to ensure retailers comply with the set price.
  • Example: The manufacturer stopped supplying stores that refused to follow the fair-trade agreement.
• To be bound by a fair-trade agreement: Describes the obligation of the retailer.
  • Example: As a licensed dealer, they were bound by a fair-trade agreement not to discount the products.

Noun

1. an agreement (illegal in the United States) between the manufacturer of a trademarked item of merchandise and its retail distributors to sell the item at a price at or above the price set by the manufacturer