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Can a sales man lie to get a sale, and then be protected by the contract that the customer signs?
Anonymous2 views2 answers
I have a family member who started a design & advertising business about 8 years ago. Recently he was approached by a man whom wanted to do sales for him involving place mat advertising. The two worked out an agreement in which the sales man formed his own DBA for an advertising co., & we do all of the designing & printing. Unfortunately, the sales man is purposely lying to get sales. We now have to deal w/people wanting refunds b/c their place mats are not placed in the locations that they were told/promised. Even though this man is knowingly lying to get sales, the contracts people are signing state LOCATIONS MAY CHANGE... DO PEOPLE HAVE GROUNDS TO SUE? Hopefully, b/c the man has a DBA, he will be the one taken to court?! I’m sick over this mans' terrible moral & bad business ethics.
This is a somewhat complicated question. First, you need to know if there a "merger clause" in the contract--usually at the end--that says that the signed contract is the whole contract and nothing said or represented before signing the contract means anything. If there is a clause, then you have a respectable argument that talk before contract signing is no relevant.
If the problems of the customers is just that the location isn't what was expected, then your disclaimer may be adequate, and I think a judge would consider it important, including a small claims judge.
On the other hand, the rule of contract law is that if a party defrauds another for the purpose of getting him to enter into a contract, that is fraud in the inducement and the contract is void.
On a more practical note, I am guessing that these cases would go to small claims court. In small claims, facts are more important than legal arguments. If the customers have some actual proof of what they were told (like a proposal or work order other than the contract), then they have a good chance to win. If not, the disclaimer will be a big help to you.
If a salesman needs to lie to make a sale, then the product is either not good enough, or the emphasis is on making a quick $ and then moving on.
You are talking about a service business. In the short run, they may be able to make money by this dishonest behavior. But in the long run, it will kill the business. Your integrity is worth far more than the quick sale. They would not need to deal with worries about lawsuits and liability if the company only associated with ethical people.
Sure, the contract might protect the business, and the fact that the businesses are separate might offer additional protection. But once word gets out about what is being done, sales the next time around are going to be a real challenge. Certainly, none of the people who were screwed the first time are going to come back.
This strikes me as less of a legal issue than a moral one. Your reaction is right on the mark. You do not want yourself or anyone you care about associated with this individual.
Best of luck to you!
James Frederick
