Business Law 1 GHA Assignment

Business Law 1 GHA Assignment
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Institutional Affiliation
Abstract
The business laws are set in place to regulate business and make sure that there is a good relationship between the business and the customers. Governments should come up with good policies that will ensure customers are not exploited by the business people. That ensures that there is harmony and good competition is enhanced. Without competition in the market, there will be the production of low-quality goods and services. Various acts have been placed by the federal government to check on the business and make sure that rules and regulation are not violated. The article is going to discuss about the Hines Cosmetic Company and the Dunkin Donuts Company. The two companies have been in the market for a long time, and they are doing extremely well. The Hines is under the question of whether they have created price discrimination through their action and the Dunkin Donuts franchise agreement is under question.
Keywords: Business laws, regulation, violation, market price
Hines is not guilty of price discrimination because of various factors. Price discrimination is a situation where a seller decides to sell similar goods or services at varying prices offered by the same individual at different markets. Market segmentation always plays a crucial role when it comes to price discrimination. However, Hines has not segmented the market in any way. The market is free to everyone as those who were given free demonstrators, and those who were not provided with them are all serving the same market.

The company is not guilty of price discrimination because he has not made price comparison separate. For price discrimination to exist, then it means that one of the sellers must make the comparison of prices very difficult (Abel, 2010). That is always brought about by setting up expenses that would favor your product more than the other people’s products or services despite being similar. However, in this case, the decision of Hines to have free demonstrators while others lack those free demonstrators has got nothing to do with the issue of complicating price comparison.
The action taken by Hines Cosmetic Co does not constitute them to be guilty of price discrimination. The Hines is not the one that came up with the reservation price. That is the maximum price that the buyers are willing to pay to get specific goods or services (Abel, 2010). Every other cosmetic company agreed to the reservation price that has been set. Therefore, that means that the Hines is not guilty because they are still operating under the reservation price that has been placed for every cosmetic company.
Price discrimination also always exists in the situation where the sellers cannot differentiate different types of consumers. Therefore, to be able to distinguish them they have to induce things such as discounts and nonlinear pricing. The action that the Hines Company decided to take was only for promotional purpose. It did not result in nonlinear pricing, and moreover, it was not done to discount. Their action was just for a promotional campaign, and thus that makes them free from price discriminating.
The franchise agreement that exists between David Ungar and Dunking Donuts is not an illegal tying. Despite the fact that the franchise always has liberty when coming into negotiations with the franchisor, certain obligations must be fulfilled. One of the significant responsibilities of the franchise is to ensure that they comply with all the reasonable requirements laid by the franchisor at any given time as regards (Abel, 2010). Looking at the situation of the Dunking Donuts, then one cannot say that the agreement is illegal. That is because they are aiming at maintaining the quality level of their product nationally. Therefore, the David Ungar have no option rather than to comply with them for their prosperity too merely.
Moreover, the franchise also has an obligation of ensuring that the franchisor must specify anything they use to proceed with their services. That is the situation the David Ungar have found themselves in. They are required to use the ingredients that have have been furnished by the Dunkin’ Donuts. The napkins, cups and other products must also be from Dunkin’ Donut trademark. They have to comply with the terms of the franchisor because they must use what has been specified by the franchisor. Working with other stakeholders in business is very vital.
References BIBLIOGRAPHY Abel, M. (2010). Protection and Affordable Care. Business Law, 37-56.