CACI No. 3305. Presumptions Concerning Costs - Distributor

Judicial Council of California Civil Jury Instructions (2023 edition)

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3305.Presumptions Concerning Costs - Distributor
A distributor’s costs include the cost of the product being distributed
and the cost of doing business as a distributor.
The cost of the product being distributed is the amount [name of
defendant] paid for the product or [his/her/nonbinary pronoun/its] cost of
replacing the product, whichever is less.
[Name of defendant]’s cost of doing business as a distributor is the
average cost of distribution over a reasonable time, rather than the cost
of distributing one item at a particular time.
[If [name of defendant]’s trade or industry has an established cost study
or survey for the geographic area in this case, that cost survey may be
considered in calculating [name of defendant]’s costs.]
[If there is no other proof of the cost of doing business, a markup of six
percent on the invoice or replacement cost of an article or product is
presumed to be [name of defendant]’s additional cost of doing business.]
[[Name of defendant]’s delivery costs are presumed to be the tariffs set by
the California Public Utilities Commission, but this presumption may be
overcome by other evidence.]
New September 2003
Directions for Use
Presumably, this instruction would also apply to sellers that are denominated
The bracketed sentences should be inserted as necessary.
There is an additional presumption regarding costs in Business and Professions
Code section 17026 for warranty service providers: ‘Cost’ as applied to warranty
service agreements includes the cost of parts, transporting the parts, labor, and all
overhead expenses of the service agency.”
Sources and Authority
Cost of Distribution. Business and Professions Code section 17026.
Cost Survey Is Evidence of Cost. Business and Professions Code section 17072.
Presumptive Evidence of Distribution Costs. Business and Professions Code
section 17073.
Transportation Tariffs Presumptive Evidence of Delivery Costs. Business and
Professions Code section 17074.
“Determination of the defendant’s cost has always been treated as an issue of
fact.” (Pan Asia Venture Capital Corp. v. Hearst Corp. (1999) 74 Cal.App.4th
424, 432 [88 Cal.Rptr.2d 118].)
“California appears to have adopted a very expansive approach to the evidence
that may be used to establish cost; no formula has been expressly sustained or
denounced.” (Pan Asia Venture Capital Corp., supra, 74 Cal.App.4th at p. 436.)
Secondary Sources
1 Witkin, Summary of California Law (11th ed. 2017) Contracts, §§ 623-629
3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts,
§ 40.153 (Matthew Bender)
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition,
§ 565.52 (Matthew Bender)
23 California Points and Authorities, Ch. 235, Unfair Competition, § 235.22
(Matthew Bender)

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