The court decision is an example of:. UCC codification. Which of the following is true of an agent? The authorization to represent the company has to be in writing.
A person who acts in place of his or her company is an agent. The actions of an agent do not have any financial impact on the company. None of the above. Cash must change hands for a contract to sell to exist, but not for a sale. The UCC defines a sale and a contract to sell as synonymous. A sale is made when the salesperson makes an offer and receives unqualified acceptance, while a contract to sell exists only when the title passes from the seller to the buyer. A contract to sell exists anytime a salesperson makes an offer and receives unqualified acceptance from the customer, while a sale is made only when the title passes from the seller to the buyer.
A sale is made as soon as a buyer agrees to a price, while a contract to sell exists as soon as a seller gives an offer. According to UCC, a sale is made:.
According to UCC, orders become contracts to sell when:. When James sold the protective window bars for the nursing home complex, he specified in the contract that the bars would be shipped FOB factory. According to the UCC, this means that:. If the terms of the contract specify FOB free on board factory, then:. However, when the purchasing agent received the order, he noticed that the aluminum sheets were of inferior quality. The salesperson had violated the.
Kevin purchased a lawn mower. The blades were so dull that the mower could not cut the grass in his backyard. Due to the existence of. If the salesperson for a paint manufacturer promised a purchasing agent that a certain brand of paint was mildew-resistant when it was not , the salesperson:. Robin is selling a Local Area Network LAN system to a company that oversees the renovation of dingy, old downtown districts into attractive, shopping areas.
Which of the following statements by the seller might be construed as an expressed warranty? Maintain a hardcopy of every memo that you try to send until you are comfortable with the system. Be sure to ask your employees to attend the training session.
Please read the instruction manual before you try to use the system. When a department store clerk tells Hilda that the coffee brewed by one particular coffee maker will make her think she has died and has gone to Starbucks heaven, the clerk is using:. In Canada, where puffery is more closely monitored than in the United States, a salesperson told a customer a particular oven would cook meat better than any other oven in the market. The salesperson might be guilty of violating the:.
A group of kaolin used in the whitening of paper manufacturers agree to a price freeze. Which of the following is an example of a tying agreement?
Jon refuses to buy office supplies from anyone but Bridget. A paper supply company agrees to give Harridan Industries a free case of paper towels for every dozen cases it purchases.
A salesperson tells a contractor that its paint is mildew-resistant when it is not. After the negotiations began, representatives of two of the firms met and developed a scheme to eliminate the third company from the competition.
This is an example of:. Defamation B. A tying contract C. A conspiracy D. Reciprocity E. Collusion When a perfume manufacturer establishes a minimum price below which a retailer may not sell its perfume, the manufacturer is engaged in:. This special incentive is known as:. Court decisions related to the Robinson-Patman Act define. Robinson-Patman B. Gramm-Leach-Bliley C. Sarbanes-Oxley D. FOB notification E. Federal Do-Not-Call Registry. Micah hoped this gift would remove some of the red tape that was slowing down the building process.
This type of gift is referred to as:. Collusion B. Subordination C. Capitulation D. Indemnification E. Lubrication Ethical imperialism B. Cultural imperialism C. Ethical solidarity D. Cultural relativism E.
Cultural solidarity Which of the following statements about U. Ethical ombudsmen C. Cultural solidarity. Jackson sells refrigeration units to hospitals, laboratories, and clinics.
He really wants to make a sale to a group of hospitals all working under the Emory brand. He believes that if he gives the purchasing agent for the hospitals a very unique and costly gift, he will be more than likely to get the order. What advice would you give him? What is an implied warranty and an expressed warranty? You have just filled up your car with gasoline.
Give an example of an expressed and an implied warranty that might have accompanied your purchase. In the early days of selling, companies studied and wrote down the sales pitches of their most p. A salesperson should only give a gift to a purchasing agent if that gift will foster a mutually p. A noncompete clause prevents employees from leaving the company until a specified amount p.
Harassment is not confined to requests for sexual favors in exchange for job considerations such p. Victims of sexual harassment should clearly indicate to their harasser that they the victim are in.
Society has determined that some activities are clearly unethical and has created a legal system p. When an item is shipped under contract terms that call for FOB free on board factory, the p. Over time, common and administrative laws have defined the difference between p. Level of Difficulty: Medium. Larry, an inexperienced sales rep, has asked you to suggest ways to deal with potential ethical p.
The manager of the linen section of a department store purchases towels only from a p. A fully-loaded sedan Level of Difficulty: Hard. When his company did not make it to the approved list of suppliers. All of the above Level of Difficulty: Medium. Level of Difficulty: Easy. The is the most active regulatory agency in developing administrative laws affecting salespeople.
The accounting of sales and costs of many new technology products has resulted in many p. When a purchasing agent bought an order of sheet aluminum used to make cans from a new p. The blades were so dull that the mower could not cut the grass p. Due to the existence of warranties, Kevin can return the mower and expect to receive a replacement that will cut grass.
Level of Difficulty: Hard. When a department store clerk tells Hilda that the coffee brewed by one particular coffee maker p.
Business defamation C. Conspiracy D. Tying agreement Level of Difficulty: Easy. Collusion Level of Difficulty: Easy. When a perfume manufacturer establishes a minimum price below which a retailer may not sell p. Court decisions related to the Robinson-Patman Act define as a seller giving unjustified special prices, discounts, or services to some customers and not to others.
Lubrication Level of Difficulty: Easy. Cultural solidarity Level of Difficulty: Easy. If the contract terms specify free on board FOB destination, the seller has title until the goods are received at the destination.
In this case any loss or damage incurred during transportation is the responsibility of the seller. The buyer assumes this responsibility and risk if contract terms call for FOB factory. Business defamation occurs when a salesperson makes unfair or untrue statements to customers about a competitor, its products, or its salespeople. In a tying agreement, a buyer is required to purchase one product in order to get another product.
Reciprocity is a special relationship in which two companies agree to buy products from each other. The Robinson-Patman Act became law because independent wholesalers and retailers wanted additional protection from the aggressive marketing tactics of large chain stores.
Principally, the act forbids price discrimination in interstate commerce. Subordination involves paying larger sums of money to higher-ranking officials to get them to do something that is illegal or to ignore an illegal act. Reciprocity 3. Tying Agreements 4. Conspiracy and Collusion 5. Interference with Competitors 6. Restrictions on Resellers 7. Price Discrimination 8. Privacy laws 9. Resolving Cultural Differences B. Legal Issues Selling Yourself.
The definition that works best for this class is that a representative is someone who acts for someone else. Why does someone act for someone else? You can have other answers such as your university, society, and so forth. Then list the various elements of the company, such as manufacturing, management, customer service, accounts receivable, credit, and so forth. You might ask when does a rep represent the customer — it is in the sales call when talking to the customer as well as when back at the company.
Now go back to their responses about motivation — how can they relate their motivation for sales positions to this act of representation? This discussion can accomplish several things. First, you can discuss how salespeople represent the customer to the company and how important that responsibility is.
The company depends on that form of representation to get crucial market information to decision makers, not to mention the impact on customer satisfaction and retention.
Second, it helps set the stage for later discussions about partnering with internal partners Chapter 16 and role conflict Chapter Most relevant to the immediate chapter, however, is that you can discuss how role conflict can tempt someone to act unethically. For example, pressure to achieve what management wants could cause a rep to sell something that the service department believes is inappropriate for a particular situation.
Or, a customer could want immediate delivery that causes the rep to lie to shipping in order to get what she needs. Add to this discussion the question of what makes a behavior unethical. For example, is asking questions unethical? Review Exhibit 2. His perspective is very interesting and makes great discussion in class.
Then turn the tables a little. Assume, for example, that you sell franchises. You ask potential buyers for audited financial statements and tell them that you want to make sure they have the capital to invest in such a franchise.
Is this fair? Is it ethical? Why or why not? By the way, this example came from a former student who encountered these practices at her former employer. These questions make for a good discussion on what is fair. Next, you could move the discussion toward the ethical conflicts confronting salespeople. Look at Discussion Question 9, as these are real situations.
You could discuss how the goals of the salesperson, his or her company, and customers can all differ. This discussion could be made very interesting by having your students explore why salespeople confront ethical dilemmas more than accountants, engineers, and production managers.
Consider all the opportunities for deception, bribes, gifts, special treatment, etc. Talk about how easily even legitimate things like entertainment could lead to unethical behavior.
It is also important for students to understand the. This class, while students can learn tools that can help them engage in unethical behavior, is about helping students develop tools that will enable buyers to make informed decisions. Ask students to identify the rationalizations people make about engaging in unethical behavior.
Suggest that if they find themselves using some of these statements, it may be an indication that the behavior they are about to engage in may not be ethical. This last discussion is a good lead-in to some questions one could ask oneself to help identify potentially unethical behaviors. We have found this exercise to be especially useful: Have your students write down a behavior they have personally experienced when interacting with a salesperson that they felt was potentially unethical.
Discuss the behaviors and use the questions in as a useful check list to evaluate the behaviors. We feel the best way to convey the principles of ethics to students is to have them confront situations, make choices, and justify them. Cases in the text provide opportunities for students to confront such issues and make for great class discussion. After a discussion of all the ways one could run afoul of the law, you could suggest ways of avoiding legal problems by discussing guidelines to reduce the chances of violating laws.
Here again, some examples help students to solidify these concepts in their minds. The more concrete you can make this, the better. Sexual harassment is an important issue to discussion. Salespeople can encounter harassment in dealing with customers, their colleagues, and their supervisor. In this chapter, we focus more on sexual harassment arising from customer interactions. Issues concerning harassment from colleagues and supervisors are discussed more in chapter 16 on the relationship between the salesperson and his or her firm.
Finally, the issues of ethical and legal issues should be related back to developing long-term, partnering relationships with customer. You might ask the students how importance ethical and legal issues are in the different type of relationships. There are certainly many ethical and legal issues in selling, as this chapter demonstrates.
Do you think there are more ethical and legal issues in selling than other jobs, such as accounting, finance, retail store management, or the like? Which issues raised in the chapter likely to be present, no matter the job, and which are likely to be specific to sales jobs? Interestingly, many of the bigger cases involving unethical behavior did not involve sales activities, though they may have involved customers.
Whether the sales profession is more unethical or not has never been empirically demonstrated; however, some issues, such as harassment, are issues in any job, not just sales. In addition, the principles that guide ethical decision-making are applicable in all fields. The nature and perhaps number of issues may be different, but the same sets of principles can guide an individual in resolving those issues.
Do you think the Internet has made salespeople more ethical? One argument could be that the Internet makes all behavior so public that it adds a watchdog element to selling not present before. Another argument is that the Internet offers so much information on products and services that it is hard to lie about them.
For centuries the guideline for business transactions was the Latin term caveat emptor let the buyer beware. Is this principle still appropriate in modern business transactions? Traditionally business was conducted by traveling merchants who did not have repeated contacts with buyers. Several factors have changed the nature of interactions between buyers and sellers. First, sellers are now large firms in fixed locations interacting with the same buyers over and over. Second, modern communications facilitates the flow of information between buyers.
Third, the level of competition has increased and thus there is more emphasis on achieving long-term competitive advantages. Caveat emptor is no longer an appropriate method for conducting business transactions. The changing conditions mentioned above mean that it is in the best interest of sellers to be concerned about buyer satisfaction.
If buyers are not satisfied, they will not make purchases from the seller in the future and they will communicate their dissatisfaction to other buyers. Developing customer loyalty by maintaining high levels of customer satisfaction is a method of gaining a long-term competitive advantage. Give two examples of what would be considered manipulation and alternatives of acceptable persuasion. Then describe how your examples of manipulation might fall into the realm of illegal activity and under which law or laws.
Manipulation, by leaving out information or lying, takes informed choice away from the customer. Some professors believe that ethics cannot be taught. Do you agree? Profs who believe ethics cannot be taught are really saying that they believe that they cannot make someone act appropriately.
That is probably true. However, sometimes people engage in unethical behavior through ignorance rather than intent. They are deceived by the rationalizations that others may offer, for example. What can be taught is how to recognize unethical situations and how to respond. You know from experience with other customers that it is very unreliable and breaks down frequently. How do you respond? Be specific as to what you would say. While answers will vary from student to student, they should have the elements of avoiding direct comparison regarding reliability.
Customers do not appreciate it when a salesrep talks down the competition. The point can be made by stressing the reliability of your product, and by asking how the other product will satisfy certain needs.
By letting the customer respond to questions about how important those needs are, the customer can usually figure it out. Your company has a contact management software system where you enter in all of the information you can about your customers.
The company wants to partner with another firm to comarket products. They want to give your database to the other firm so the other firm can create marketing pieces and e-mail them to your clients.
Is this legal? This is not a smart idea, for if your clients find out your company did this, they may not trust you in the future. What is appropriate is to for your company to email the offer to those in your database who have given you permission to email them with information about offers.
While that may be extreme, what might the ethical issues be with accepting a gift from a customer? How should you respond if offered a gift? This true scenario causes a number of issues. At some point, it is likely that the client will call this gift into accounting, wanting something back from the salesperson such as a lower price. Yet, friendships do form between salespeople and their customers — and within the context of friendship, it makes perfect sense. The manufacturer is offering the spiff, and management is fully aware of it.
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