Legal Aspects of Business Decisions Essay Example | Topics and Well Written Essays - 250 words

Legal Aspects of Business Decisions - Essay Example This analysis forces courts to consider the pro-competitive effects of the restraint as well as its anticompetitive effects. Certain categories of restraints to be illegal per se: that is, they are conclusively presumed to be unreasonable and therefore illegal. For those types of restraints, the court does not have to go any further in its analysis than to recognize the type of restraint, and the plaintiff does not have to show anything other than that the restraint occurred. Three elements must be alleged to sustain a cause of action under section 1 of the Sherman Act, 15 U.S.C. 1 (1982): a contract, combination or conspiracy; a restraint of trade; and an effect on interstate commerce. Weiss v. York Hospital, 745 F.2d 786, 812 (3d Cir.1984), cert. denied, 470 U.S. 1060, 105 S.Ct. 1777, 84 L.Ed.2d 836 (1985). Restraints of trade can be classified as horizontal or vertical. A horizontal agreement is one involving direct competitors at the same level in a particular industry, and a vertical agreement involves participants who are not direct competitors because they are at different levels. Thus, a horizontal agreement can be among manufacturers or retailers or wholesalers, but it does not involve participants from across the different groups.