IBO Case Study

To become an authorised IBO (upline), they need to sign IBO Registration Agreement which shows in Appendix 1, they are necessary to pay Business Services and Support Fees which stated in IBO Registration Agreement. The relationship of IBO which indicated in Rules of Conduct of Amway mention that IBOs should not signify directly or indirectly the connection between themselves and other IBOs that they have supported or who have them sponsored.

Herbalife International is one of the multi-level marketing company that sells nutrition complements, weight management and other personal-care products. If a person is interested to join the company as an Independent Distributor, they must be sponsored by a Herbalife Member (“Sponsor” or “Upline”) and

According to Federal Trade Commission (FTC) , local counsel accused that Defendants endorsing their business by using variety of networks such as videos, live presentations and other meetings to encourage consumers to become distributors. Defendants attract consumers by showing some video about “how successful and earn large amount of income after they become a member of Herbalife”. In addition, Defendants also conduct some seminars. Many of these events include live presentations at which speakers boast about the high incomes they earn as Herbalife Distributors. These events have names such as “Extravaganzas,” “Leadership Development Weekends,” and “Success Training Seminars. Apart from that, Defendants also publish some printed materials to inspire their distributors and recruit new members. In” Presentation Book” which distributed between 2012 through 2014 which included in the starter pack, defendant’s use some exaggerate words to persuade new members to join Herbalife. For example” [t]he opportunity to earn more than you ever thought possible and make your dreams come true!” The book even included pictures of fancy cars and cash alongside the quote” Great Products Mean Great Business Opportunities! Dream it. Do it” which show in Appendix 3 to persuade consumers to join Herbalife.(bank)

Based on the complaints, the relationship of trust and confidence between the Defendants and the new member occurs when the member trust

First, the requirement it has to show that one of the parties such as an offender is in a situation to dominate the willpower of the other. The first component is “domination”. Secondly, the dominating litigant use their position to obtain an unfair benefit over the other party. For example, it must be show the contract that the party enter into with appears, either on the face of it or the evidence offered, to be excessive. Under English Law, the two elements “domination” and “a relationship between trust and confidence” are totally different from Malaysia Law. In English Law, “domination” is more relevant to a cases that related to actual undue influence, but not associated to presumed undue influence cases. Since that if a person who falls within the explanation laid down under sub-section (2) of Section 16 which includes a person who” place in a fiduciary relationship to the other”, a person consider to be in a situation to dominate the will of the other which stated in Section 16 of the Contracts Act. A person upon whom the complainant has be placed trust and confidence is regard under sub section (2) of Section 16 as the dominating party for the purpose of sub section (1) and sub section (3) of Section 16 of the Contracts