Long term contracts to boost sales figures


Question 1: WebShows a is new online media streaming company. From $14.95 per month, WebShows offers customers online access to thousands of movies and TV programs. Their three main competitors are Netflix, Foxtel, and Stan.

WebShow's best salesperson is Sarah. She consistently signs up more than twice the number of customers of any other salesperson in the team. She is also very effective at signing up customers for long term contracts (more than 2 years). However, some of her sales activities are beginning to create problems for the company.

Sarah has been pressuring high school students under 18 years of age to sign long term contracts to boost her sales figures. In one instance Sarah saw a student smoking a cigarette outside the store and threatened to call the students' parents if he did not sign a long term contract.

Advise Webshows.

Question 2: A WebShows manager meets with Sarah and explains the problems her sales tactics are causing for the company. She says she understands and agrees to correct her behaviour.

One month later, however, Webshows receives a complaint that Sarah signed up an elderly Italian couple that could not understand English. Sarah knew that the elderly couple did not understand what they were signing or the nature of the ongoing costs involved. Another salesperson that works with Sarah speaks Italian but Sarah did not ask him to translate the terms of the contract because she did not want to lose the sale.

Advise Webshows.

Question 3: Nathan is a regional manager and travels interstate for work. He checks into a hotel in Perth in the downstairs lobby and takes his luggage to his room. He notices and reads the following exclusion clause posted on a sign on the back of the room door:

"The management accepts no liability for personal items belonging to guests that are damaged or stolen."

Nathan unpacks his belongings including his work laptop and leaves the room to take a swim in the hotel pool. When he returns he discovers his laptop has been stolen.

Advise Nathan

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Business Law and Ethics: Long term contracts to boost sales figures
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