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Abstract
Recent precedent makes it clear that a company may not avoid liability for misrepresentations on the part of independent sales representatives and distributors. The expansive reach of the Internet widens the company's potential exposure for such misrepresentations. As a result, the company may decide to restrict online advertising or at least require pre-approval for all online advertising. More importantly, however, the company must vigilantly monitor online advertising to ensure compliance with the company's policies. If distributors are violating the company's policies, the company must have procedures in place to provide and document that the distributor has been given notice of such violations. Ultimately, distributors that violate the company's policies must be terminated. Terminating a distributor that fails to abide by the company's policies can send a message to other distributors that enforcement penalties are credible, which can have a beneficial self-policing effect. In the absence of clear policy guidelines and vigilant monitoring, a company may face significant exposure for the acts of its independent distributors.