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LSDefine

Simple English definitions for legal terms

referral sales contract

Read a random definition: compulsory disclosure

A quick definition of referral sales contract:

A referral sales contract is an agreement between a consumer and a seller. The consumer agrees to buy goods or services at a higher price, and the seller agrees to pay the consumer for each new customer they refer. This type of agreement is similar to a chain letter, where success depends on an endless supply of new customers. Referral sales contracts are often considered illegal and are prohibited by the Uniform Consumer Credit Code.

A more thorough explanation:

A referral sales contract is a type of agreement between a consumer and a seller. In this agreement, the consumer agrees to buy goods or services from the seller at an inflated price. In return, the seller agrees to compensate the consumer for each customer or potential customer referred to them.

For example, a seller may offer a referral sales contract to a consumer where the consumer agrees to buy a product at a higher price than usual. In return, the seller promises to pay the consumer a commission for each new customer they refer to the seller.

However, referral sales contracts can be problematic because they rely on an endless supply of customers. If each buyer refers 25 people, and each of those people refers 25 more people, the number of potential customers quickly becomes unmanageable. This is similar to a chain letter, where the success of the arrangement depends on an ever-increasing number of participants.

Because of these issues, referral sales contracts are often prohibited by law. For example, the Uniform Consumer Credit Code prohibits referral sales schemes where the rebate is conditioned on an event that occurs after the consumer agrees to buy or lease. This means that a referral scheme that only requires the consumer to provide names is allowed, but a scheme that requires the consumer to provide names of people who actually become customers is prohibited.

Overall, referral sales contracts can be risky for both consumers and sellers. Consumers may end up paying more than they should for goods or services, while sellers may struggle to find enough new customers to make the arrangement profitable.

referral | refinancing

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Just got my Michigan rejection
BookwormBroker
16:10
same
RoaldDahl
16:10
@HopefullyInLawSchool: what if i already got rejected. does it mean anything
HopefullyInLawSchool
16:12
@RoaldDahl: Likely not however it could mean nothing
RoaldDahl
16:15
So if it means nothing does that mean something?
HopefullyInLawSchool
16:17
Possibly
RoaldDahl
16:26
Cool
RoaldDahl
16:26
thank you!!!! i hope it means something
pinkandblue
16:31
fart
IrishDinosaur
16:36
Mich R gang lesgooo
Did anyone else get that random get to know nova email?
HopefullyInLawSchool
17:21
Ya it was sent to all YM applicants
starfishies
17:37
Anyone get the NDLS email inviting you to apply for something even though they haven’t made a decision on your app yet
17:38
Better yet I got the email and I was rejected last month
starfishies
17:38
Wtf
starfishies
17:39
and the deadline is in like a week what is this
any cardozo movement?
BatmanBeyond
18:01
Sent a LOCI via portal, but I'm wondering if email would have gotten me a swifter response
BatmanBeyond
18:02
This whole hold/wait-list/reserve system is a headache
loci already?
BatmanBeyond
18:09
If the odds are like 1-2% I don't think it matters much by the numbers
12:11
I got the same NDLS email
OrangeThing
12:18
I think the user profiles are broken
19:29
Any word out of Notre Dame?
19:29
Only the invitation to apply for LSE
19:29
Anyone received a decision from NDLS?
19:50
when did u guys apply that just heard from umich? they havent even glanced at my app yet
0:30
how am i supposed to spy on people when profile links are broken?
Right. Broken links smh
I've been UR since first/second week of Jan, no updates otherwise, is that a bad sign? At or above median LSAT and above 75th gpa.
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