Example – License Agreement

A good example of a defendant who successfully argued that no agreement ever existed is that of a discount food retailer who licensed other stores to sell his foods. In the license agreement provision of the contracts he would have the other companies sign, the licensee agreed to sell his goods “in a suitable price range and competitive or lower in price with the same or similar merchandise and products offered for sale in other discount food stores in the trading area.” While directing the licensee to use other stores’ pricing in coming up with their own, the agreement did not direct them to collude with other stores, nor did it “fix” the price of any food sold. The defendant successfully argued that no agreement ever existed, citing the necessity of maintaining his image as a low mark-up discount retailer as justification for the provision.