• Fri. May 27th, 2022

Following are the Agreements Prohibited in Business Law that You Need to Know


Sep 26, 2020
Following are the Agreements Prohibited in Business Law that You Need to Know

Having a business that runs smoothly is one of the expectations of every owner. Moreover, if the business is running well and has a good impact on the environment and the surrounding community. Of course you already understand that good business must be mutually beneficial to each other. Not only that, a good owner must also comply with the laws and regulations that have been made by the government. These laws and regulations are the benchmark that the company is a legal company or not. The law also binds the agreement legally.

A business agreement such as the sale and purchase of drugs is an example of a business agreement that involves an object whose purpose is prohibited by statute. In fact, there are other treaties that are also prohibited by state law. For this reason, before you enter into an agreement with another party, you must be careful and also check in detail the contents of the agreement and the applicable laws so that you are not caught in the wrong business activities. The following agreements are prohibited in business law that you need to know.

Agreement with the Purpose of Making Prices Lower Than Market Prices

The retail price on the market has been set by the government. For entrepreneurs who are from price monopolies or from prices set by irresponsible middlemen, the lowest retail price is determined by the government. the prohibition of making agreements to make goods lower than the price of goods in the market where this price has been set by the government. For that, if you make an agreement with a system like this or the contents of the agreement which make the price of goods look cheap by making it lower than the market price, then you are involved in a prohibited agreement. If indeed you already know that this agreement is prohibited, then don’t even start. In addition to your business being at stake, you can also get punished by the authorities.

Entering into a trade zone division agreement that may lead to monopoly

Of course, trading with a monopoly system is certainly not a surprise for you, at least you’ve heard about this system in school lessons. In fact, until now this one system is still valid and rooted in society. If you are involved in an agreement for distribution of product marketing territories with a business partner, with this agreement you will be able to market your product in a certain area or in your respective area, then in fact you are involved in a prohibited agreement. The agreement that you do is classified as an agreement that can create a monopoly or one seller who controls the market.

Monopolizing the Market

Conducting a market monopoly is very unfair business competition because it only benefits one party. A company is said to have exercised a monopoly if it has controlled more than 75% of a certain type of goods or services in a certain market share. Until now, most business people feel happy and happy when their business experiences large profits, especially if their products have many enthusiasts. This is of course good for business people, but you need to review the business agreement you are currently in. The reason is that in addition to harming yourself, the fines given are quite heavy, namely in the amount of hundreds of millions to billions of fines.

Make an agreement to equalize the price of goods

You must have thought that equalizing the price of goods is one business idea that you can apply if you have several competitors on the same type of product. It turns out that business studies by equating the price of goods or the price of services are included in the prohibited agreement. This one agreement can only be made if it gets permission from the government with the existence of the law and also a company that agrees to enter into an agreement is a company entity that has been formed by 2 or more companies (joint venture). Equating the prices of goods or services seems good, but it can kill other people’s businesses or services. In legal matters, it must be based on what is applicable because it has been regulated by law. For this reason, it is important that you understand well what laws you can do and what you shouldn’t do. Make sure you also study the legal issues and laws that govern your business affairs so that you have sufficient insight and knowledge so that you do not get involved in illegal agreements or agreements that will harm yourself.