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Business Law

Business Law

Assignment 1: Discussion Assignment

The discussion assignment provides a forum for discussing relevant topics for this week based on the
course competencies covered. Use the textbook, lectures and scholarly outside sources to support your
work. As in all assignments, cite your sources in your work and provide references for the citations in APA
format. Post the answers to both parts in one discussion post and do not attach documents.

By Saturday, April 16, 2016, submit your answers to Part 1 and Part 2 to this Discussion Area.

Discussion Question Part 1

Scenario 2 � Competition


Cube Computers, a manufacturer and seller of personal computers and tablets, entered into agreements
with suppliers. The agreement required that suppliers not sell Cube�s computers below Cube�s
suggested minimum retail price and in return, Cube would not sell its products at retail prices in the store

owners’ respective territories. Are these agreements valid?

A famous movie star indicated on national television that Cube was her favorite computer. After the
comment, sales of Cube computers increased 40 percent. Since demand outpaced supply, Cube decided
not to sell any more computers unless an additional software package was purchased. A competitor
informed the Office of the Attorney General of this policy, asserting it was illegal. Explain the legal basis

for the complaint and decide which party will prevail.

Business Law

Part 1 – Competition

Based on the anti-trust rules, as provided by the Federal Trade Commission, the
agreements between Cube Computers and the suppliers are valid. Unlike in the past where anti-
trust rules would prohibit retail price influence by manufacturers, these rules have since been
relaxed, allowing manufactures to set prices and also select the retailers they wish to deal with
(Adams, 2011). These are known as manufacturer-imposed requirements. The laws maintains


that it is possible for the manufacturer to avoid unfair competition by dictating minimum price
and protect consumers through setting a maximum price; hence the reason why such agreements
should not be entirely branded as illegal. Accordingly, the anti-trust laws dictate that each case
presented should be ruled based on the circumstances or the ‘rule of reason’ (Federal Trade
Commission, 2016).
The decision by Cube Computers to restrict purchase of their computers following the
increased demand may be assessed using two arguments, making it neither legal nor illegal. The
actions by the company could is legal based on the refusal to supply provision as provided by the
Sherman Antitrust Act (Dameron, 2016). The Act provides that a firm has the right to refuse
trade with a company or individual as long as it is not a result of an anticompetitive agreement or
an exclusive strategy aimed at creating or maintaining monopoly. Tying a product to another sale
however raises anti-trust issues, although it does not expressly make the action illegal. As
dictated by antitrust rules on tying sale of two products, the rule of reason prevails and the
company’s intention would therefore be used in determining whether the action is illegal
(Federal Trade Commission, 2016). In the case of Cube Computers for example, the reason was
to cope with the rising demand and not necessarily to force consumers to buy the software.

Part 2 – Federal Administrative Agencies

The role of the Department of Veterans Affairs is to safeguard the welfare of veterans
and their dependents through the management of federal benefits. Commonly known as VA, the
department is responsible for administration of federal benefits including health care for
veterans, survivors and their families. This ensures that following retirement, veterans and
dependents receive the desired support to live a comfortable life, including access to health care
and housing. The department also caters for funeral expenses.


The department performs different functions, which can be explained based on its
subdivisions as follows (VA Website):
Veterans Health Administration: This subdivision is responsible for the health care aspect
including provision of health care and providing health benefits. VA operates over 1700 health
facilities including clinics, hospitals, domiciliaries, community living centers and counselling
Veterans benefits Administration: This division concerns itself with the administration of
benefits by conducting initial registration, determining eligibility, and providing the key benefits
which include insurance, home loan guarantee, education, employment and vocational
rehabilitation, compensation and pension.
National Cemetery Administration: this division plays the role of ensuring decent burial for
veterans through services such as burial benefits and memorial benefits. The division also
responsible for maintaining VA cemeteries.


Adams, R. J. (2011). A Brief Review and Assessment of the Leegin Decision: Who Wins and

Who Loses When Manufacturers Are Free to Set Retail Prices? Business & Society
Review, 116(2), 213-236.

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