sale-of-goods
Can a law against selling be circumvented by a gift and an unrelated purchase?
<p>I stumbled across this news article: &quot;<a href="https://metro.co.uk/2014/08/19/shops-posts-hilarious-august-peanut-sale-poster-to-circumvent-bottled-water-ban-4837709/" rel="nofollow noreferrer">Shop posts ingenious 'August peanut sale' poster to circumvent bottled water ban</a>&quot;</p>
<p>The article describes a music festival that was not allowed to sell bottled water to patrons, so they sold peanuts for $1.50 each and provided a &quot;free&quot; bottle of water with the purchase. The overall result is that the customer has paid $1.50 for a bottle of water and a peanut, but because the money was ostensibly exchanged for the peanut, nothing illegal has taken place.</p>
<p>In fact, the placeholder purchase is not required, because each person could claim that they gave away the money or the item of their own free will, independent of expectation from the other.</p>
<p>I'd like to know if this loophole, regardless of the goods that are forbidden to be sold, has ever been challenged in a court of law and what the outcome was. I don't care too much about jurisdiction but I'd prefer answers from the United States or countries with legal systems descended from English Common Law (Australia, Canada, United Kingdom).</p>

<h2>Depends on the law</h2>
<p>It’s unclear if this is a contractural restriction on the shop or a local ordinance relating to the festival. In any event, it depends on the law and what, precisely, the shop is doing.</p>
<p>If the restriction is on supply, this doesn’t work. If it’s on sale then this might work if done properly.</p>
<p>If it is a contractural restriction that the shop freely entered, it is unlikely that this ruse would protect them from a breach of contract suit because the shop is obviously acting in bad faith in a calculated attempt to avoid their obligations.</p>
<p>If it really is a law restricting sales, then giving it away free would work. However, what the shop is doing is not giving away free water - they are bundling a peanut and a bottle of water and selling that. To avoid liability, the shop would need to give the water away for free without selling the peanut to anyone that asked.</p>
<p>An analogous case related to liquor happened in <a href="/questions/tagged/new-south-wales" class="post-tag" title="show questions tagged &#39;new-south-wales&#39;" aria-label="show questions tagged &#39;new-south-wales&#39;" rel="tag" aria-labelledby="new-south-wales-container">new-south-wales</a>. All states in Australia require a liquor licence to sell alcohol in most cases, however, providing you comply with responsible service laws, it’s not illegal to give it away to the public.</p>
<p>As is common, many hairdressers provide their customers with a complementary glass of wine. This is fine in Queensland or Western Australia because those states have specific exemptions for hairdressers, but illegal in NSW.</p>
<p>A salon owner in Sydney was successfully prosecuted for this practice because, when the undercover police officer requested a “free” glass without a haircut, she was denied. The magistrate concluded that this meant the wine was not, in fact, free and that the salon was therefore selling liquor without a licence. At $11,000 per glass, the salon lost money on the deal.</p>

<p>That incident hinged, at best, on the contract between vendors and the organizers. There were false implications that it was related to liquor control regulations, it was apparently related to a plan to have a monopoly on water sales that went bad because demand vastly outstripped supply. Nobody has offered anything resembling a contract between vendors and the local paper sponsoring the event. It would therefore depend on the exact wording of the contract. There would have to actually be some such restriction stated in the contract. If there were some vague verbiage to the effect that vendors must comply with rules set by the organizers, the organizers could not then impose a rule &quot;food may not be sold&quot; since selling food is the whole point of the contract. If we assume that the contract says &quot;You may not sell bottled water&quot;, then the organizers would have a basis for a suit against the vendor. However, it is not clear that they would have been able to collect much by way of damages. The organizers would have to show that the vendor's sale decreased the profit that would have been otherwise made, but the surrounding circumstances indicated that there was probably little effect on sales.</p>
