Source: https://www.givensviolins.com/services/teacher-gift-program/
Timestamp: 2019-04-20 08:20:25+00:00

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The following is an excerpt from a speech given by Charles Beare of J. & A. Beare, London, GB at the Violin Society of America Convention and Competition, Minneapolis, Minnesota, November 1988.
… The other old custom is the payment of commissions to members of the teaching profession. This has been going on since time immemorial. My father tells me that in the depression we paid up to 20 percent on lesser instruments and still had a turnover of under £300 a month at times. Our firm gave up paying commissions over fifteen years ago and I cannot say that business has declined, although there were a few teachers whom we never saw again. Many times I have urged dealers to work against the practice, but I have come to the conclusion that it will eventually be the associations of the teachers themselves who will outlaw it, although perhaps not just yet. Many teachers, of course, genuinely have the best interests of their pupils at heart, and are unswayed by considerations of commerce in watching over the search for the right instruments, but it is certainly true that others make a nice little sideline out of it. I have never met a dealer who thought that the practice as such had anything in its favor, but I have spoken with many who have told me that business is steered very firmly away unless the customary percentage is offered. This is why I feel that any initiative aimed at eliminating the custom should come from bodies representing the teaching profession, and I would urge them to think about it.
The following quote is from the article “Mysteries of the Market” by Mary VanClay from the November “1996 Resource Guide” of Strings magazine.
… Given the complexity of buying a stringed instrument, it’s no wonder many players are desperate for advice from a source they can trust. For many, this source is their teacher. But adding teachers to the market mix brings us to another passionate argument, one that raised hackles in our survey responses and in conversations with people throughout the trade; teacher commissions.
Nearly everyone has heard about them, even if they haven’t personally paid or received one. If a teacher helps a student pick out an instrument and the seller then pays the teacher; that teacher has received a commission. It usually comes in the form of a check, the amount being some percentage of the sale price of the instrument. Few people would argue that teachers who help students make such an important purchase deserve some repayment for their time and expertise. Indeed, some teachers charge their students up front, requesting compensation by the hour, for example, just as they would for music lesson time.
The problem arises when payment comes from the seller rather than the student. Sometimes teachers badger shops for payment after a sale, and sometimes shops extend the offer. Unscrupulous teachers can give advice to students based on the money they can make off a sale, rather than on the quality of the instrument or the student’s needs. The student effectively pays a hidden fee, the seller’s commission cost having been built into the final price of the instrument. The danger to the consumer becomes especially acute if the student has no idea that the teacher is being rewarded for bringing in a sale, which is often the case.
Delicate indeed. The trust built over years is shattered if a student realizes a teacher has been dishonest about advice given and benefits received. Suspicions players already harbor about dealers are intensified. And businesses that don’t pay commissions bitterly resent those that do, believing they would have more customers if teachers weren’t steering students elsewhere in order to make a profit.
The situation is a notoriously difficult one to discuss openly, let alone solve. Few teachers or businesses want to admit to the practice. But there is no question that it occurs. We asked all of the businesses participating in our anonymous survey whether they paid commissions to teachers, and 23 percent answered “yes” (another 15 percent did not respond at all). Of that group 😯 percent answered “no” when asked whether students were aware of the practice.
Chapter 16, “The Hazards of Secret Commissions and the Duty to Disclose”1 by Carla J. Shapreau, from Violin Fraud: Deception, Forgery, Theft and Lawsuit in England, 2nd Edition, Brian W. Harvey and Carla J. Shapreau, Oxford University Press, 1997, by permission of Oxford University Press.
It is common practice in the USA for teachers to receive secret commissions from violin dealers in whose direction the student has been steered. This practice also occurs in England, as mentioned by Brian Harvey in Chapter 5 and in Appendix I. The harm of secret commissions is felt not just by the student, who may unknowingly be paying for his or her teacher’s commission through an inflated sales price. In addition, violin makers and dealers who refuse to engage in this industry custom may suffer competitive injury when teachers choose to send their students to those who pay such commissions.
Generally, students place special confidence and trust in their violin teachers, and teachers have great power to influence decisions made by their students. Students typically rely on their teacher’s expertise, superior knowledge, and training. In certain circumstances, there may be a special relationship of trust and confidence between teacher and student that may arguably give rise to an elevated duty of care by the teacher, or even a fiduciary duty. ‘A fiduciary relationship may exist or come into being whenever trust and confidence are reposed by one person in the integrity and fidelity of another… or when there is a reposing of faith, confidence and trust, and the placing of reliance by one person on the judgement and advice of another.’ 2 Whether or not a fiduciary relationship exists is a question of fact. The special relationship that exists between a student and his or her violin teacher, whether fiduciary or not, may expose the teacher to liability for accepting secret commissions when a conflict of interest exists between the teacher’s self-interest in obtaining commissions and his or her duty to the student.
In Stephen Jay Photography Ltd. v. Olan Mills Inc.,7 a photographer paid commissions to schools in exchange for the schools’ endorsement as the ‘official photographer’. Both the photographer and the schools disclosed to the students that an unspecified portion of the photograph price would be given by the photographer to each school to support various school activities.
In contrast to the facts in Harris and Stephen Jay Photography, a violin teacher, much like the agent in McCollum, may act as a special agent for the student or as an intermediary for purposes of the purchase transaction. The teacher may arrange for the specific transaction and vouch for the condition and attributes of the violin, thereby arguably creating a relationship between the student and the teacher worthy of protection by the antitrust laws.
One way to avoid potential liability for violation of state unfair trade practices statutes, for fraud, or for violation of the Robinson-Patman Act in connection with commissions is for teachers to be compensated openly for the valuable expert service that they can provide to their students in the instrument-selection process by candidly accepting payment for such expert services. In the absence of such a disclosure, violin teachers, dealers, and makers expose themselves to possible liability if the requisite degree of trust and confidence is reposed in the teacher by the student with respect to circumstances surrounding the student’s purchase of a violin.
1 Portions of Chapter 16 are reprinted, in part, from an article written by the author in the Michigan Law Review. Carla J. Shapreau, “Strings Attached – Violin Fraud and Other Deceptions”, Vol. 92, No. 6, pp.1743-53, May, 1994.
2 See 36A C.J.S. Fiduciary 385, 387 (1961).
3 Cal. Bus. & Prof. Code § 17045 (emphasis added); see also United States v. Girolamo, 808 F. Supp. 1445,1450 – 2 (N.D. Cal. 1992) (finding that kickbacks paid to obtain a competitive edge violated California’s Unfair Practices Act).
4 See e.g. Heliontis v. Schuman, 226 Cal. Rptr. 509, 512 (1986) citing Bernard E. Witkin, 4 Summary of California Law 8th edn. (1974) §§ 459-64.
5 See e.g. Zinn v. Ex-Cello-O Corp., 306 P.2d 1017, 1025 (Cal. Dist. Ct. App. 1957) (‘[W]here the defendant, who has no duty to speak, nevertheless does so … he is bound to speak truthfully and to speak the whole truth’); see also Rogers v. Warden, 125 P.2d 7, 9 (Cal. 1942); Restatement (Second) of Torts (1977) § 551 cmt. g.
6 15 U.S.C. § 13 (c) (1988). See e.g. Rangen, Inc. v. Sterling Nelson & Sons, 351 F.2d 851 (9th Cir. 1965) (holding that a corporate defendant’s commercial bribes to a state employee to obtain competitive advantage violated § 13(c)), cert. denied, 383 U.S. 936 (1966).
7 713 F. Supp. 937 (E.D. Va. 1989), aff’d, 903 F.2d 988 (4th Cir. 1990).
8 713 F. Supp. at 941.
9 Stephen Jay Phootgraphy, Ltd. v. Olan Mills, Inc., 903 F.2d 988, 993 (4th Cir. 1990).
10 940 F.2d 1272 (9th Cir. 1991).
11 940 F.2d at 1275.
12 217 Cal. Rptr. 919 (Ct. App. 1985).
13 Harris, 940 F.2d 1274-5 (citing McCollum, 217 Cal. Rptr. at 923).
14 See e.g. Rangen, Inc. v. Sterling Nelson & Sons, 351 F.2d 851, 859 (9th Cir. 1965) ( refusing to construe the ‘services rendered’ exeption to include service performed by a buyer’s agent for the seller but against the interest of the buyer, because such an interpretation would undermine the fiduciary relationship between buyers and their agents), cert. denied, 383 U.S. 936 (1966); Modern Mktg. Serv., Inc. v. Federal Trade Commn., 149 F.2d at 970 (7th Cir. 1945) (finding that brokerage commissions could not be paid by sellers to the buyers’ agent for services that were incidental to the agent’s main activities on behalf of the buyers, even though the services were genuine and of benefit to the sellers). In Modern Marketing, the Seventh Cicuit noted that’ [t]he agent cannot serve two masters simultaneously rendering services in an arm’s length transaction to both’, 149 F.2d 978 (quoting Great Atl. & Pac. Tea Co. v. Federal Trade Commn., 106 F.2d 667 (3d Cir.), cert. denied, 308 U.S. 625 (1939)).
Even when a seller renders a service for the benefit of the student-buyer, when the actual services rendered are de minimis, the exception to § 13(c) will probably provide no refuge. Cf. Hennegan v. Pacifico Creative Serv., Inc., 674 F. Supp. 303, 306 (D. Guam 1987) (holding that § 13(c) does not prohibit payments by store owners to tour bus drivers for services rendered in bringing tourists to their store because such services are not de minimis).
Chapter 16, “The Hazards of Secret Commissions and the Duty to Disclose”, by Carla J. Shapreau, from Violin Fraud: Deception, Forgery, Theft and Lawsuit in England, 2nd Edition, Brian W. Harvey and Carla J. Shapreau, Oxford University Press, 1997, by permission of Oxford University Press.
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The following is reprinted by permission from the Winter 2001/2002 Issue of String Notes.
The MNSOTA board has passed a resolution opposing undisclosed teacher commissions because we believe they are against the best interests of students.
When a shop routinely gives a percentage commission to the teacher, that cost of doing business is built into the price the student pays. When commissions inflate the purchase price, students will find it difficult to recover their purchase price when they sell their instrument or trade up. We prefer that shops no offer commissions but instead offer the best possible prices.
In making an instrument purchase, parents expect each shop to be proud of their work and have a “we’re the best” attitude. Students usually need a knowledgeable, trusted guide who is not party to their transaction to help them choose. That guide is usually the teacher. If a teacher accepts a secret commission, they have a conflict of interest between their own self-interest in obtaining commissions and their duty to the student in giving advice.
The trust guilt up between the teacher and student is powerful and should not be abused. If a student finds out about a secret commission after a purchase, their trust in teacher will be broken; the student and parent may wonder how honest the advice really was. Where the teacher is legitimately representing the shop, it should not be a secret. If the student knows that a commission is involved, they can decide if they want to find someone else outside the transaction to advise them.
To be sure, teachers should be paid for the time and effort they put into advising students. We need to take lesson time to train students to audition an instrument or bow. We need to teacher students how to discriminate the differences in sound and feel, projection, tone color, playability. We need to help students develop their own preferences. When students are comparing instruments, many teacher schedule and charge for extra lessons devoted to that comparison. Some structure their lesson fees so that extra time for advising is already built in. In all these cases it is appropriate that the student receiving the advice is paying for the teacher’s time.
While the MNSOTA board strongly opposes undisclosed teacher commissions, board members had more wide ranging opinions on gifts from shops to teacher. (Some shops occasionally give gift certificates or thank you baskets or other token gifts to teachers.) As shops and teachers work together for the good of the students, it is always nice to have effort recognized and appreciated. Good will and good relations make all our jobs easier. It’s always nice to say “thank you.” If a shop wants to give an occasional nominal gift that does not affect the price of the instrument and does not create a conflict of interest for the teacher, the gift is not necessary, but most teachers appreciate it. If the gift appears to have the expectation of special favor or appears to be an attempt to influence a teacher’s objectivity – that’s not OK. Teachers who are uncomfortable receiving gifts if they happen to be offered can always give them away, possible to the student.
MNSOTA is proud that traditionally shops in Minnesota have not offered teacher commissions. We appreciate the good working relationships that we have with the many fine shops in our state and we look forward to continuing to work together in the best interest of our students.

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