Signed contract saying we cannot sell their product on Amazon. Can we?

[drackow2008]

What is the name of your state (only U.S. law)? CA

We signed a quick piece of paper with a manufacture that says we will NOT sell their product on Amazon.

Can they legally tell us where NOT to sell their product even if we signed the paper?

If we sell the product to another company, can they sell it on Amazon with no implications for us?

[FlyingRon]

Yes it's legal. If you agreed to not sell it on Amazon, you can't sell it on Amazon. Distributors and retailers are not covered by the First Sale doctrine. While they could sue you, what usually happens in this case is they cut you off from getting any of their products to sell anywhere.

[swalsh411]

I have a related question. I agreed not to do something. Is it OK if I do it anyway? Also, I have poor ethical standards and do not believe in keeping my word.

[drackow2008]

Ethics were not the question. It was a pure legal question.

To understand the first sale doctrine better. If we sell to a retailer and they in turn sell on Amazon we are not longer liable nor is the retailer as we have no agreement about where they can/cannot sell?

[swalsh411]

You are asking if it's OK to do something you specifically agreed not to do as a condition of doing business with this company. Do you expect others with whom you do business to uphold their end of the agreement? Why do you believe it's OK for you not? It's very much an ethical issues, or more accurately that you have poor standards.

[FlyingRon]

Ethics were not the question. It was a pure legal question.

To understand the first sale doctrine better. If we sell to a retailer and they in turn sell on Amazon we are not longer liable nor is the retailer as we have no agreement about where they can/cannot sell?

You'd have to read your agreement with your supplier. You may be in violation to wholesale to another person who sells it on Amazon, or you may not. The First Sale doctrine NEVER applies to you. It applies to a legtimate retail purchaser.

Even if your contract doesn't bar selling to those who will sell it through channels adverse to the wishes of the manufacturer, they can still cut you off. Ask a lot of the guys who are dealing with the pet meds and contact lenses. Once the manufacturer suspects you're feeding one of the internet outlets, your chances of getting further product are nil.

[drackow2008]

We do not sell on Amazon. I was reviewing a contract and it mentioned we cannot sell on Amazon which I have never seen before. It specifically states we cannot sell on Amazon but does not mention anything about who we sell to selling on Amazon as that is out of our control. It would be impossible for us to monitor every customer so I was curious we did not want to be liable for a customer of ours who might sell it on Amazon.

[FlyingRon]

We do not sell on Amazon. I was reviewing a contract and it mentioned we cannot sell on Amazon which I have never seen before. It specifically states we cannot sell on Amazon but does not mention anything about who we sell to selling on Amazon as that is out of our control. It would be impossible for us to monitor every customer so I was curious we did not want to be liable for a customer of ours who might sell it on Amazon.

People who buy at retail can't sell an item as new (it's not once it's sold) so if they do so on Amazon they're probably violating not only Amazon's rules but fraud. I wouldn't get too worried about it.

Again, unless you have some contractual requirement requiring them to continue to send you product, you're always at risk for them to cut you off at solely their discretion.

[Zigner]

We do not sell on Amazon. I was reviewing a contract and it mentioned we cannot sell on Amazon which I have never seen before. It specifically states we cannot sell on Amazon but does not mention anything about who we sell to selling on Amazon as that is out of our control. It would be impossible for us to monitor every customer so I was curious we did not want to be liable for a customer of ours who might sell it on Amazon.

You are the one with the agreement. You can't control what others do.

[FlyingRon]

You are the one with the agreement. You can't control what others do.

But again, nothing stops the manufacturer from refusing to ship product to wholesalers who appear to be feeding unwanted resale channels.

[Zigner]

But again, nothing stops the manufacturer from refusing to ship product to wholesalers who appear to be feeding unwanted resale channels.

Fair enough.