CHAPTER 743 Going-Out-of-Business Sales

Public auctions, going-out-of-business sales and distress merchandise sales of any nature are injurious to the peace, health and welfare of the community. When employed as an established merchandising practice, these sales cause irreparable injury to merchants not employing such devices, render uncertain the conditions of employment in retail establishments, reduce the value of public property in the community and foster destructive and unfair competition in the business community. These sales, when they are conducted as established practice, involve an unusual hazard of fraud and misrepresentation.

It is the purpose of this chapter to prohibit public auctions, going-out-of-business sales and distress merchandise sales as established merchandising practice and to require such sales to be licensed limiting going-out-of-business sales and public auctions solely to the purpose of liquidating estates and/or businesses. (1967 Code §115.17)

743.02 DEFINITIONS.

The following words and phrases when used in this chapter, unless otherwise provided, shall have the meanings respectively ascribed to them in this section:

(a) "Applicant" means any person applying for a license hereunder and includes the principal if such person is the agent of another who is the true owner notwithstanding whether that other is an individual, partnership, association, firm or corporation, and further notwithstanding whether the name of the true owner appears on the application or not.

(b) "Distress merchandise sale" means any offer to sell, or sale to the public of goods, wares or merchandise on the implied or direct representation that such sale is being held other than in the ordinary course of business but not otherwise defined herein. Without limiting the generality of the above, distress merchandise sales shall include but not limited to any sale advertised either specifically or in substance to be any one of the following:

(1) Fire sale;

(2) Smoke and/or water damage sale;

(3) Adjustment sale;

(4) Insurance salvage sale;

(5) Mortgage sale;

(6) Adjustor's sale;

(7) Reorganization sale; or

(8) Other terminology of similar intent to any of the above.

(c) "Going out of business" means a sale, offering for sale or advertising for sale of goods, wares or merchandise to the ultimate consumer, where the offeror or owner implies, or the consumer is reasonably led by the offeror or owner to believe that the owner or offeror will no longer continue to engage in such business at its present location. The owner may continue the use of such name at a different location within the City only if the name has been and is presently being used at the different location.

If the person, firm or corporation has been operating two or more business establishments at different locations within the City, the person, firm or corporation may continue to operate the business establishments under the same name in all of the locations other than the locations wherein such person, firm or corporation is going out of business under this section or without complying with the one-year clause referred to hereinafter.

(d) "Going-out-of-business sale" means any offer to sell to the public or a sale to the public of goods, wares or merchandise on the implied or direct representation that such sale is in anticipation of a business termination at its present location or that the sale is being held other than in the ordinary course of business. Without limiting the generality of the above, "going-out-of-business sales" shall include but not be limited to any sale advertising either specifically or in substance to be any one of the following:

(1) That he is going out of business;

(2) That he is liquidating;

(3) That he is selling fifty percent (50%) or more of his stock, his entire stock or selling out to the bare walls;

(4) That he has lost his lease;

(5) That he is selling out his interest in the business establishment;

(6) That everything in the store or establishment must be sold;

(7) Trustee's sale;

(8) Bankrupt sale;

(9) Save us from bankruptcy sale;

(10) Insolvent sale;

(11) Assignee's sale;

(12) Must vacate sale;

(13) Quitting business sale;

(14) Receiver's sale;

(15) Loss of lease sale;

(16) Forced out of business sale;

(17) Removal sale;

(18) Liquidation sale;

(19) Executor's sale;

(20) Administrator's sale;

(21) Warehouse removal sale;

(22) Branch store discontinuance sale;

(23) Creditor's committee sale;

(24) Adjustment sale;

(25) Defunct business sale;

(26) Selling out interest sale; or

(27) Other terminology of similar intent to any of the above reasons.

(e) "Goods", "wares" and "merchandise" mean all kinds of goods, wares and merchandise, except gold, silver, plated ware, precious stones, watches, clocks, jewelry or like merchandise. If, however, a merchant under this chapter has gold, silver, plated ware, precious stones, watches, clocks, jewelry or like merchandise, as an incidental part of its inventory and/or is not known as a jeweler or like establishment and/or such merchandise constitutes no more than ten percent (10%) of its total inventory, then in addition to compliance with this chapter, he must also comply with Chapter 746 as it applies to such merchandise only. However, only the license under this chapter shall be required when the merchandise constitutes no more than the ten percent (10%) public auction. A sale, offering for sale or advertising for sale to the highest bidder of goods, wares or merchandise at retail at any place where all persons who choose are permitted to attend and offer bids.

(f) "Inventory" means the wholesale cost of goods, wares and merchandise.

(g) "Person" means any individual, partnership, association, firm or corporation. (1967 Code §115.18)

743.03 APPLICABILITY.

The provisions of this chapter do not apply to a person who is executing a process or order of a court of competent jurisdiction, or to a licensed pawnbroker or loan company which is selling or offering for sale unredeemed pledges of chattels as provided by law. (1967 Code §115.19)

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