Contract Law in Marketing Programs - Case Study Example

Running head: CONTRACT LAW IN MARKETING PROGRAMS Contract Law in Marketing Programs [Click here and type [Click here and type your institution's name] Abstract Contract law inside a marketing program is well defined in the U.K. as in an updated government documentation in 1998 that is explanative in what is allowable inside all contracts and revocation of offers presented by the organisation offering schema. This paper will look at one such company, British Gas Trading, respecting their marketing plan and how it is applicable to contract law. There is litigation against British Gas and the Data Protection Register for violation of data collection methods used in its gas marketing methods and the subsequent breech of contract filed. This paper will look at both the contract law itself in a business setting and how this is applicable to past litigation issues with British Gas Trading and how their current marketing schema. Contract Law There are many aspects of contract law that form the common law entity in individual countries. Within the United Kingdom there are basic issues addressed within the basic common law contract which include: when and how is a contract formed, when may a party escape obligations of a contract (such as a contract formed under duress or because of a misrepresentation), what is the meaning and effect to be given to the terms of a contract, and, what is the remedy to be given for a breach of contract.1 Within the contract itself, there is the need to have a few explanatives inside the contract which includes an offer of acceptance, consideration and contractual intention for a simple contract to exist, otherwise no consideration is needed. This inclusion of consideration in a contract formation is important to be in place otherwise no consideration will be in place. A consideration under English Law is defined as "a very controversial doctrine comprising a series of sub rules which purport to govern when a promise made by one party may be enforced by the party to whom the promise is made. Consideration in its traditional form in English law means no more no less that this: that, for parties to be able to enforce a promise, they must have given some quid pro quo for it: something in exchange for the promise"2 Rationale / Aims The aim in discussing contract law inside an existing company is to understand their marketing schema while at the same time looking to understand how their marketing methods relate to contract law. The chosen company is British Gas that now forms part of the Centrica group. There are many areas of the British Gas/Centrica marketing plan that can affect or not affect the contractual obligations to the customers and the government. Literature Review Through Centrica's website and their Investor Relationship, it is the objective of British Gas to transform its current objectives with respect to its customer service agenda as well as appealing to the needs of future marketing schemes. The current customer data base shows there are low gas and high gas users and look to segmentation of their customer base by "choosing not to deliver, by exclusion, retention treatments or attempt to cross sell additional products, probably because of their debt profile. When we see the demonstration later of what we call 'screen prompts', one of the potential prompts we may apply to this customer group is the no sale prompt, which is critical for the agent to not waste their time and effort" (Smith, 2003) The marketing schema is not just limited to phone marketing, but also using total household management as well as web online methods. This will allow for the importance of full disclosure. As a prime method of ensuring contract law is followed, the online website requires full disclosure of the contract that the customer is to sign; but, in the other marketing methods such as door-to-door customer signups and phone signups, this is not always possible or not used. The legal information found on the site includes the following privacy disclaimer3: Privacy This policy applies to personal information we hold about individuals, sole traders and partnerships. It does not apply to information we hold about companies and other organisations. Centrica plc and its subsidiary companies believe it is important to protect your privacy, and so we are committed to giving you a personalised service that meets your needs in a way that also protects that privacy. This policy explains how we may collect information about you and then use it to meet your needs. It also explains some of the security measures we take to protect your privacy, and tells you certain things we will not do. When we first obtain personal information from you, or when you take a new service or product from us, we will give you the opportunity to tell us if you do or do not want to receive information from us about other services or products. You can normally do this by ticking a box on an application form or contract. You may change your mind at any time by emailing us at the address below. 1. Collecting information We may collect personal information about you from a number of sources, including the following: From you when you agree to take a service or product from us, in which case this may include your contact details, date of birth, how you will pay for the product or service and your bank details. From you when you contact us with an enquiry or in response to a communication from us, in which case this may tell us something about how you use our services. From documents that are available to the public, such as the electoral register. Please note that some of the personal information we hold about you may be 'sensitive personal data' within the meaning of the Data Protection Act 1998 - for example, information about your health or ethnic origin. 2. Using information 2.1 Information you provide or we hold about you (whether or not under our contract (or contracts) with you) may be used by us or our agents (or both) to: a. identify you when you contact us; b. help identify accounts, services and/or products which you could have from us from time to time. This identification process may be carried out by an automatic scoring system, which takes account of the information you have provided, any information we hold about you and information from third party agencies (including credit reference agencies). c. help run, and contact you about improved running of, any accounts, services and products we have provided before, or provide now or in the future; d. carry out marketing analysis and customer profiling (including with transactional information) and create statistical and testing information; e. help to prevent and detect fraud or loss; and f. contact you in any way (including mail, email, phone, visit, text or multimedia messages) about products and services offered by us and selected partners. We will only contact you in this way if you have previously shown your consent. 2.2 We may allow other people and organisations to use information we hold about you: a. to provide the services you have asked for; b. as part of the process of selling one or more of our businesses; c. if we have been asked to provide information for legal or regulatory purposes; or d. as part of current or future legal proceedings. From time to time, these other people and organisations may be outside the European Economic Area in countries that do not have the same standards of protection for personal data as the UK. 2.3 We may also allow your information to be used by other Centrica Group companies (including those using the British Gas, Scottish Gas, OneTel, Telco Global and Dyno Group brands) for them to carry out any of the above purposes. 2.4 We may monitor and record communications with you (including phone conversations and emails) for quality assurance and compliance. 2.5 Where you give us information on behalf of someone else, you confirm that you have provided them with the information set out in this document, and that they have not objected to the uses of their personal information described in it. If you give us sensitive data about yourself or others (such as health details or details of any criminal convictions of members of your household), you agree (and confirm that the relevant subject of the information has agreed) to us processing such information in the manner set out in this document. 3. Protecting information We have strict security measures to protect personal information. This includes following certain procedures (for example, checking your identity when you phone us) and encrypting (encoding) data on our websites. 4. The Internet 4.1 If you communicate with us using the internet, we may occasionally e-mail you about our services and products. When you first give us personal information through our website, we will normally give you the opportunity to say whether you would prefer us not to contact you by e-mail. However, you can always send us an e-mail (at the address set out below) at any time if you change your mind. 4.2 Please remember that communications over the Internet, such as e-mails and webmails (messages sent through a website), are not secure unless they have been encrypted. Your communications may go through a number of countries before they are delivered - this is the nature of the Internet. We cannot accept responsibility for any unauthorised access or loss of personal information that is beyond our control. 4.3 We may use 'cookies' to monitor how people use our site. This helps us to understand how our customers and potential customers use our website so we can develop and improve the design, layout and function of the sites. A cookie is a piece of information that is stored on your computer's hard drive which records how you have used a website. This means that when you go back to that website, it can give you tailored options based on the information it has stored about your last visit. You can normally alter the settings of your browser to prevent it from accepting cookies. 4.4 If you do not want us to use cookies in your browser, you can set your browser to reject cookies or to tell you when a website tries to put a cookie on your computer. However, you may not be able to use some of the products or services on our website without cookies. 6. Links This website may contain links to other sites or recommended suppliers. Please remember that we are not responsible for the privacy practices of these other sites. This privacy policy applies only to information collected on this website. 7. Further Information If you would like any more information or you have any comments about our privacy policy, please either write to us at Data Protection Manager, Privacy Unit, Centrica plc, Millstream West, Maidenhead Road, Windsor, Berkshire SL4 5GD or email us at CentricaDataProtection@centrica.co.uk. We may amend this policy from time to time, in which case we will publish the amended version on our website, and you can ask us for a copy by writing to the above address or by e-mailing CentricaDataProtection@centrica.co.uk. The Data Protection Act of 1998 ensures that any data collected by companies are collected with knowledge of the person unless in specific circumstances. The principles of the Act comprise of: 1. personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless it meets the requirements of Schedule 2 and 3; 2. personal data is to obtained for one or more specified and lawful purposes; 3. personal data shall be adequate, relevant and not excessive in relation to the purpose for which they are processed; 4. personal data shall be accurate and kept up to date; 5. personal data processed for any purpose(s) shall not be kept longer than required for the purpose intended; 6. personal data shall be processed in accordance with the rights of data subjects under this Act; 7. appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of personal data; 8. personal data shall not be transferred to a country or territory outside the European Economic Area unless adequate protection is ensured (Schedule 1, Data Protection Act of 1998)4 Methodology By looking at the entire practice of 'telemarketing' in obtaining customers for gas companies in this time of media savviness, consumers are far more reliant on their knowledge of their rights as consumers as well as understanding that there is a large problem of identity theft occurring where their data is far more susceptible to unscrupulous usage. By ensuring that companies continually look at ways to ensure data is not stolen or used illegally can they be assured new customers are trusting of their company. Through the Centrica website, many of these measures are in place and are continually held up to scrutiny in an effort to ensure the company is not infringing on personal data usage or selling that information to any third party. Analysis / Findings The only plausible way to ensure that customers' personal data is not compromised, consumers have the Data Protection Act to ensure this is fulfilled. One such case in 1997, which was subsequently appealed in 1998 was respectful of the breaching of the "first data protection principle, which provides that 'personal data shall be processed fairly and lawfully'. The enforcement notice also related to an admitted breach of the second and third data protection principles by disclosure of data other than for a registered purpose. The circumstances of the breach of the second and third data protection principles were not directly related to those concerning the first data principle" (British Gas Trading Limited v The Data Protection Register, Appeal Decision, 1998, p 3). Prior to the merger with Centrica, the Registrar "founds her conclusion that BGTL has and is unlawfully processing data on the basis that statute and other principles of law apply to render it unlawful for a monopoly supplier to process the personal data of gas customers whenever a purpose of the processing is to enable direct mail to be sent to gas customers to promote services or supplies, other than those related to or connected with gas supply" (British Gas Trading Limited v The Data Protection Register, Appeal Decision, 1998, p 4). The process of bringing this case against BGTL was through leaflets with requests for any customer to reply back if they feel there was unfair processing taking place. Through investigation, it was found this practice was occurring as far back as early 1997.5 Conclusion It is found that often times a company in an effort to embark on attracting new customers will sometimes look to bend the rules in an effort to gain the edge over competitors. This sometimes infringes on the same consumers rights to keeping their data private. In the above example of British Gas Trading Limited, prior to its merger with Centrica, did such that in a time when consumers were not as savvy with respect to understanding the full extent of contract law infractions as well as identity theft. Nowadays, companies not only rely on the internet but their corporate standards staff to ensure that they are following all protocols with respect to data collection and ensuring that the contracts they put forth to the consumers are adhered to when they are approached by phone, internet or personal appointment and that what is written in the contract is kept between the customer and the company. Any infringement on this contract in any form allows the consumer to seek restitution. Recommendations / Future Developments As the internet makes information transference that much more prolific in ensuring that all contract specifications and privacy measurements are in place, companies need to find more informative measures to the consumer to check the status of their personal data, where their contract stands with respect to company records (ie. If their contract was cancelled or renewed for any reason) to ensure that the customer has that information on hand. References Centrica. (2006). Privacy and Internal Controls webpages. Retrieved June 1, 2006 from http://www.centrica.com/index.asppageid=384 British Gas Trading Limited and The Data Protection Register. Appeal Decision. 1998. Retrieved June 2, 2006 from http://www.informationtribunal.gov. ... _decisions/documents/british_gas.pdf Data Protection Act 1998, Chapter 29. Crown Copyright 1998. Retrieved June 2, 2006 from http://www.opsi.gov.uk/ACTS/acts1998/19980029.htm European Contract law. (1999). The Principles of European Contract Law. Chapter 1: General Provisions. Retrieved June 2, 2006 from http://frontpage.cbs.dk/law/commission_on_european_contract_law/PECL%20engelsk/engelsk_partI_og_II.htm Wikipedia. (2006). Contract law (British). Retrieved June 1, 2006 from http://en.wikipedia.org/wiki/Contract_law#Scope_of_common_law_contract_law Wikipedia (2006). Consideration under English law. (2006, May 28). In Wikipedia, The Free Encyclopedia. Retrieved 17:13, June 2, 2006, from http://en.wikipedia.org/w/index.phptitle=Consideration_under_English_law&oldid=55552994 Read More