California CodesBusiness and Professions Code - BPCDivision 7 — General Business RegulationsPart 2 — Preservation and Regulation of CompetitionChapter 4 — Unfair Trade PracticesArticle 2 — DefinitionsSection 17027
In establishing the cost of a given article or product to the distributor and vendor, the invoice cost of the article or product purchased at a forced, bankruptcy, closeout sale, or other sale outside of the ordinary channels of trade may not be used as a basis for justifying a price lower than one based upon the replacement cost as of the date of the sale of the article or product replaced through the ordinary channels of trade, unless the article or product is kept separate from goods purchased in the ordinary channels of trade and unless the article or product is advertised and sold as merchandise purchased at a forced, bankruptcy, closeout sale, or by means other than through the ordinary channels of trade.
Such advertising shall state the conditions under which the goods were purchased, and the quantity of the merchandise to be sold or offered for sale.
Notes
Limits use of invoice cost from a forced, bankruptcy, closeout, or other sale outside ordinary trade channels to justify a price below replacement-cost pricing. The invoice cost may be used only if the goods are separated from ordinary-channel goods and advertised and sold as specially acquired merchandise; advertising must state the purchase conditions and quantity offered.
Use as reference
Lexinter.net | California Code, Business and Professions Code - BPC § 17027 | https://laws.lexinter.net/codes/california/business-and-professions-code/division-7/part-2/chapter-4/article-2/section-17027