Question

Chiriqui Imports Company imports coffee beans and sells them under two-year contracts to Drink-It-Up, Inc., and other coffeemakers. The contracts require that during the two-year term a coffeemaker not buy beans from Chiriqui Imports’s competitors. The contracts do not limit the coffeemakers’ purchase of tea or other beverage ingredients from other suppliers, how­ever. In the second year of the contract, Drink-It-Up protests that this arrangement violates antitrust law.

1. Is Drink-It-Up correct?

2. If not, why not? If so, under which antitrust statute, or statutes, could these con­tracts be held illegal?

Answer 1

Drink-it up is correct in accusing Chiriqui Imports of violating antitrust law. According to this law a company must not stop it's consumers from buying from it's competitors as equal opportunities must be provided to every company . This breach comes under monopoly laws of the antitrust law and as per this the contract can be held illegal.