Sales people talk or send e-mails to customers and prospects all day long. They make sales presentations, handle objections, quote price and delivery, write proposals, and close orders. After a while it almost becomes automatic or second nature since this is what sales people do. Yet, sales people probably don’t think of themselves as acting as a legal agent of the company.
Sales people are legal agents for the companies that they represent. A sales person has the legal authority to obligate the company to an agreement or commitment. Furthermore, the obligation does not have to be in writing. Yep, you can even talk your way into trouble by saying the wrong things. Put the wrong thing in writing and you may set your company up for a legal battle. The sad fact is that most sales people freely make agreements without the blessing of management or legal counsel; even worse many sales people don’t understand the authority that they have as a legal agent of the firm. After all, they are “just” sales people.
The Uniform Commercial Code (UCC) is a set of laws governing commercial transactions. The purpose of the UCC was to establish a uniform set of rules to govern commercial transactions, which are often conducted across state lines. The goal of the UCC law is to create a body of rules that would realistically and fairly solve the common problems occurring in everyday commercial transactions. The UCC states the following:
– A sales presentation is an invitation to negotiate.
– Sales people are agents when they have the authority to make offers.
– An offer happens when the agent (salesperson) quotes specific terms to the customer.
– A sale is defined as the transfer of title to goods by the seller to the buyer for consideration which is price.
– An order happens when the offer is put in writing and both parties agree. However, it does not always have to be in writing to be binding.
Sales people do these things all the time. OK, I am not an attorney, but the UCC tells us that the work done by sales people is serious stuff and not to be taking lightly. Yet, few sales people look at their work with an attorney’s perspective.
Agents have responsibilities. They need to tell the truth. Exaggerating a product’s capabilities or omitting a serious drawback may seem like simple “puffery” but it can be legally viewed as statements of fact or warranties. In other words, an over zealous sales person who misrepresents the facts to a customer can get in big trouble quickly. The salesperson is the public persona of a company and as such must be held accountable at the highest standards.
Selling is a serious business, so be careful about what you say and do when dealing with your customers.
John Bradley Jackson
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