CACI 3305 Presumptions Concerning Costs—Distributor

California Civil Jury Instructions CACI

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.]

Directions for Use

Presumably, this instruction would also apply to sellers that are denominated “retailers.”

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)