Nab v. Hills, 452 P.2d 981 (1969)

Can a person unwittingly be held to a pyramid scheme's contractual requirements?


The Hills contracted with Nab to have their home resided with aluminum for use as a model home to induce others to purchase similar aluminum siding. The Hills were to receive free siding and 7% of any sales generated by the use of their model home, beyond the cost of the initial siding job, according to the assertions of the company's salesman. They signed several agreements that purported to extend credit to them for the cost of the initial constructions and bind them to certain terms. The salesman involved reassured the Hills that the contracts were mere formalities that allowed the company to claim the cost as advertising expenses. Once the job was finished, they began receiving bills for the siding. Nab attempted to foreclose a lien on the property for the cost of the siding after the homeowners refused to pay because of the salesman's assertions. The Hills defended by claiming that they were fraudulently induced to agree to a pyramid scheme.

Full case and case summary is also available online at:

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:State, 9th Circuit, Idaho | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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