ONLINE-ADS>> Billing Policies & Liability

MMG - John Audette (ja_at_mmgco.com)
Thu, 20 Aug 1998 10:48:40 -0500 (CDT)

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Greetings....

I'm doing research on an important topic -- where does the liability lie
when an agency buys media advertising on behalf of a client? I know that
I/O's usually have some statement about agency liability, etc., but my
preliminary research has indicated that there may be a classic
Agent/Principal structure. The agency acts as agent for the advertiser who
is the principal. The principal receives the primary benefit and is has
primary financial responsibility.

As the numbers get larger it's important to know exactly what our exposure
is as an agency as it directly affects the billing terms that we are able
to extend to clients. I know of one traditional agency in Europe that buys
over $2B annually and demands that all of their clients pay in advance in
cash or issue a P.O. that can be credit insured (they even credit insure
P.O.'s issued by Fortune 500 level companies). They inform me that they
know of many smaller agencies that have gone out of business because they
had extended terms to clients that subsequently failed to pay, and the
ensuing legal net was thrown over the agency in addition to the advertiser.

Is it necessary to be that conservative in the U.S.? Does anyone know of
U.S. case law on this subject?

Thanks,
John Audette

M u l t i m e d i a M a r k e t i n g G r o u p I n c
.......... The Online Agency ~ Since 1994 ............
John Audette ......................... President & CEO
541.330.1527 ................. mailto:ja_at_mmgco.com
Internet Advertising, Marketing & Public Relations
~ Delivering Measurable Results & Positive ROI ~
................. http://www.mmgco.com ..................

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• Next message: /e/y/e/s/c/r/e/a/m/ - Adam Boettiger: "Re: ONLINE-ADS>> Why media buyer distrust publishers"
• Archive Home Page
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• Previous message: murfnbish_at_aol.com: "Re: ONLINE-ADS>> Jupiter Conference Coverage by ClickZ - 8/18/98"
• Next in thread: Bill Pohlman: "Re: ONLINE-ADS>> Billing Policies & Liability"

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