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MCS 3040 (220)
Chapter 22

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University of Guelph
Marketing and Consumer Studies
MCS 3040
Joseph Radocchia

Chapter 22- Professional Services Professional- someone engaged in an occupation, usually governed by a professional body requiring the exercise of specialized knowledge, education, and skill. - Most mid-sized or large businesses have professionals on staff. For example, DT employs a professional accountant, as its CFO, and a practicing lawyer, as an in-house legal counsel. Other professional services, such as those of an engineer, architect, or consultant are hired on an ad hoc or project basis. - Professionals who are employees are governed by the basic principles of employment law, relationships with external professional service providers are defined by contract law. - Professional/client relationship is a special relationship of trust and loyalty and is held to a higher standard than other service providers - The legal and ethical obligations these professionals owe the business vary according to the capacity in which they are hired; they are in a fiduciary relationship and can be liable for negligence and their employers can be vicariously liable. Ethical Obligations - Professionals retaining membership in their profession continue to be bound by the rules of professional conduct and codes of ethics of their professional bodies - These obligations bring a level of independence that distinguishes a professional employee from a manager, both owe ethical obligations to their employers but professionals have additional obligations imposed by their governing bodies. E.g. an accountant has ethical obligations to the employer but also has ethical obligations to her profession (governing bodies, rules and obligations of being an accountant) Responsibilities in Contract - Retainer- an advance payment requested by a professional from a client to fund services to be provided to the client. - Clients are often unaware of provisions in the contract dealing with how work will be billed and when retainers will be required - Both professional and client must comply with the terms - Professional service contracts- client must address key terms of contract prior to engaging a professional’s service Fiduciary Responsibilities - Fiduciary- a person who has an obligation to at primarily in the interest of the person to whom responsibility is owed - E.g. employers owe this to employees, partners owe this to one another - Professionals act in a fiduciary capacity and are deemed by law to owe duties of loyalty, trust, and confidence that go beyond those contractual or tort responsibilities owed by the nonprofessional service provider - Fiduciary must act primarily in the interest of the person to whom a responsibility is owed The Professional’s fiduciary responsibilities include: - Avoid any conflict of interest between the client’s affairs and those of the professional or the firm - Refrain from using position for personal profit beyond charging a reasonable fee - Follow the client’s instructions - Disclose all relevant information to the client - Act honestly, in good faith, and with due care - Maintain confidentiality of client information Duty of Confidentiality- the obligation of a professional not to disclose any information provided by the client without the client’s consent. Privilege- the professional’s right not to divulge a client’s confidential information to third parties Responsibilities in Tort - Negligence is most common - The professional must perform the services in accordance with the standards of a reasonably competent member of that profession Negligence claimant must prove: - The professional owes the claimant a duty of care - The professional has breached the standard of care - The professional’s condu
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