Backhaul Allowance Law and Legal Definition
Backhaul allowance refers to a price discount given by a seller to a customer who purchases goods from a seller’s warehouse.
In Anderson Foreign Motors, Inc. v. New England Toyota Distributor, Inc., 492 F. Supp. 1383, 1387 (D. Mass. 1980), the court observed that “if a seller adopts a uniform delivered pricing system, its pricing options must be "(1) uniform, and (2) available to all customers on a non-discriminatory basis." 85 F.T.C. at 1176. While the delivered pricing system is in operation, a backhaul allowance to one customer is illegal; a non-discriminatory option offered to all customers to purchase at an alternative f. o. b. price is not. Thus an improper backhaul allowance involves selective deviation from a delivered pricing system once it's in place. It is not the equivalent, as defendants seem to suggest, of charging a uniform mill or base price for the product and either adding a delivery charge according to the distance of the purchaser from the plant, or permitting all purchasers to contract independently for delivery”.
