Legal Definitions - engrossing

Engrossing refers to a historical legal term for the practice of buying up large quantities of a particular commodity or product with the deliberate intention of gaining control over its supply. The ultimate goal of engrossing was to create an artificial scarcity, allowing the buyer to then sell the goods at significantly inflated prices, thereby profiting excessively and potentially harming consumers or competitors.

Historically, engrossing was considered an illegal act in many jurisdictions, including England, where it was treated as a misdemeanor until the 19th century. It was viewed as a harmful practice that disrupted fair markets and exploited the public by manipulating prices of essential goods.

Here are some examples illustrating the concept of engrossing:

• Example 1: Essential Medical Supplies

  Imagine a scenario during a widespread health crisis where a single distributor manages to purchase nearly the entire global stock of a specific, life-saving medication. If this distributor then hoards the medication and refuses to sell it to hospitals and pharmacies unless they agree to pay prices far above the usual market rate, this would be an illustration of engrossing. The distributor's intent is to monopolize the supply of a critical item to dictate its price and maximize profits during a period of high demand.

• Example 2: Agricultural Products in a Local Market

  Consider a wealthy merchant in a small town during the 18th century who, just before harvest season, buys up all the contracts for the upcoming wheat crop from every local farmer. By securing the entire regional supply of wheat, the merchant effectively controls the town's bread supply. When the harvest comes in, the merchant can then sell the wheat (or flour made from it) to the townspeople at a much higher price than usual, as there are no alternative sellers. This action aligns with the historical definition of engrossing, as it involves acquiring a large quantity of a staple commodity to control its price.

• Example 3: Industrial Raw Materials

  A large manufacturing conglomerate identifies a rare mineral that is crucial for producing a new generation of high-tech batteries. The conglomerate then proceeds to buy up all known reserves of this mineral from various mining operations worldwide, as well as securing exclusive rights to future extraction. Their aim is not necessarily to use all the mineral themselves, but to prevent rival battery manufacturers from accessing it, thereby stifling competition and ensuring their own dominance in the new battery market, allowing them to charge premium prices. This strategic acquisition of a vital raw material to control an industry's supply chain reflects the core principle of engrossing.