Is it illegal to sell a puppy with demodectic mange?

I bought a puppy on May 26, 2009 and today i went to a vet to discuss strange hairless spots appearing on his body about a week or two at most ago. We did a scrape test to test for mange and the test came back negative. But there is a possibility that he does have demodectic mange. IF he does have mange, it is not showing up right now because of the early stage he is in. I was given a medicated shampoo and wait two weeks to go back and see how his condition is and for another test.

I did a little bit of research and from listing to my vet…Demodectic Mange (he has the generalized form– it covers his whole body not one little area) is not a contagious form of mange. It is caused from the immune system having a “glitch” which does not protect him from the mange. Not only is it hereditary but puppies get mange to begin with from the mother when cuddling and nursing the puppies in their early days. One of my friends told me that it is illegal to sell a dog with mange. The websites also says that you are not to breed dogs with generalized demodectic mange, so I was wondering exactly what are the rules as far as breeding dogs with mange! Thanks all your help will be Greatly appreciated!!!
Thanks so much for all the answers I already have. I AM KEEPING MY PUPPY, no questions asked about it! As of right now he is not in pain which is the good news but i don’t want it to get worse and he start being miserable!! My puppy is a boy and I planned on breeding him with my neighbor’s dog but now i realize that if it is mange that won’t be possible. I recieved my dog from a breeder and i was not told if the mom or dad had it or not. I plan on contacting the people once I get a 100% certain answer on what my puppy has.

The breeder, if it was a good breeder, should pay for any medications your pet needs til about 6 months old. Or allow you to return your pup for a refund.