Character of William Who Works as a Mid-Level Manager in ERU in Houston - Case Study Example

CASE STUDY DISCUSSION ON THE LEGAL AND ETHICAL ISSUES 8th November, 2008 GENERAL FACTS The case study revolves around the character of William who works as a mid-level manager in ERU in Houston, Texas dealing with temporary employment of people in various industries. William is glad to be a part of ERU which acknowledges values and attributes such as dedication, sincerity, loyalty and honesty of their workforce. A strong linkage between professionalism and ethics is incorporated in the vision and mission of the firm. Further in the study it has been revealed that William and his fiancée Jennifer who is a real estate agent have plans to get married. They have purchased a house and threw a party. At the party William meets his old friend Mark who is a recruiter in the national employment agency called ‘You Need We Find Inc’. However, Mark who was dissatisfied with his current job, requested William to look for a suitable vacancy for him in his firm. William readily agreed to this and forwarded a recommendation letter. Trusting William’s words, Mark was offered a job in ERU. A few days later William came across certain facts regarding Mark and the reason for his discontentment with his previous job which stunned him. Marks’ family history was even more disturbing. Mark was under suspicion and has been put behind bars for grave charges such as fraud and deception. He couldn’t be trusted especially when the incident of reimbursement of an airline ticket was revealed. Further the case also reflects the legal issue in which William’s fiancée was offered a real estate agent job on the company’s purchase of the land. The deal was offered by Thomas who was Jennifer’s ex- colleague at her previous place of work. Jennifer agreed and offered property worth $3, 00,000. The deal was accepted and duly signed by all signatories including Thomas within 24 hours, to be closed within a period of two weeks. However an important condition was included into the contract which stated that ‘failure to close within two days after the stated closing date shall be deemed to a breach of contract’. Legal actions against the buyer will ensue thereafter. However, if the buyer pays a non-refundable deposit of $2,000, legal actions will not be taken in lieu of retention of the $2,000.” Thomas was not able to deposit the required sum. Hence, it was very important for him to close the deal within the stipulated time limit. But Thomas couldn’t meet up the deadline and backed out at the last minute. As a consequence, the sellers informed Thomas and Jennifer that they would certainly take legal actions as it has already been covered in the contract terms. Thomas bluntly told Jennifer that he was not at all concerned as his corporation didn’t exist and he had nothing to lose even if the sellers took any sort of legal action against him. The only person who was in trouble was Jennifer. She was the intermediary in the deal and moreover she was in dire need of money to keep up with her marriage expenses. She couldn’t afford to loose such a huge amount of money because of the penalty for the breach of contract. FACTS RELEVANT TO THE LEGAL ISSUE The legal issue of the case study revolves around a contract between William’s fiancée who agreed to act as a real estate agent on request of her former business partner Thomas. Jennifer had a deal with Thomas; she offered the land which cost $3, 00,000. She had some issues related to the contract which were not duly abode by Thomas in the respected time period. Due to the absence of any real corporation existing, it became difficult to press charges against Thomas and make him pay for the deal due to the breach of contract. However, the sellers have confronted her with the legal proceedings in relation to the breach of contract and now Jennifer was in trouble. LEGAL ISSUE The legal issue of the case is whether Jennifer is to be blamed and held responsible for this situation; whether she should be penalized by paying the deposit as stated by the contract terms. Another issue is what legal actions can be taken against Thomas who shunned off his responsibilities bluntly after accepting the terms and conditions of the contract and also what legal actions can be taken against Thomas and Jennifer by the court. LAWS A contract requires a valid offer, acceptance and consideration to be justified. Valid offer and acceptance are realized only by performing exactly as requested in the offer. Valid consideration on the other hand includes any amount or thing bargained by the other party and which also has a certain legal value. Valid consideration must aim to do or promise to do something that a person has no legal obligation to do, or on the contrary a person refrains from doing or promises to refrain from doing something which a person has legal right for. In this contract the offer to purchase displays the price which the buyer (Thomas) is willing to pay for the land, the closing date of the sale (two weeks) and other important terms of the transaction. The required forms which are to be filled out can be taken forward by a real estate agent or an attorney - Jennifer in this case. However, there are often one or more additional attachments or addendums which add more terms to the offer. In this case it was the condition to deposit a non-refundable amount of $2,000 which was added in order to avoid future problems. In other words this added point can also be called an inclusion of contingencies in the offer. The seller can respond to the buyer’s offer by accepting it or reject­ing it or making a counteroffer; in this case the offer was readily accepted by Thomas. When the buyer and the seller sign the contract, it becomes a legally binding contract subject to satisfying any contingencies. The offer provides the date when the closing will occur. At the closing, the buyer and seller are required to sign documents but here Thomas backed out before closing was completed. The real estate agent on the other hand owes a duty of fair dealing with both the parties; he can be appointed by the seller or the buyer and is entitled for a commission on the deal. APPLICATION OF FACTS TO LAWS In this case it is important to know to what extend the terms of contract are valid and have legal power. There is a presence of all the conditions as there was a valid offer by the sellers which was put forward by Jennifer to which Thomas agreed; valid consideration included a bargained value of $3, 00, 000 for each party; the contract stated clearly that a non-refundable deposit of $2,000 if made can ensure no legal hassle in case of not meeting the required conditions. Thomas was not under any obligation to agree to the condition before the acceptance of the contract. The breach of contract is an unplanned part of an agreed exchange between the parties and unless there is a possibility for some exchange there cannot be a contractual liability. Contract law in other words means the law based on liability for breach of promise (Beale G H, Bishop D W, Furmston P M, 2007). As far as breach of contract is concerned a remedy must be available as it is implied by the following citation: ‘Where there is a right, there must be a remedy’, (Cohen N, McKendrick E, 2005). The fundamental rule in law is that parties to contracts must perform as per the specifications laid in the contract unless the parties agree to the change of the terms and conditions of the contract. In this case the actions of the party who deviates or absconds from the terms of the contract which are implicitly accepted are called ratification. However, by the action or non-action of the other party which is missing in this case, and if there is no acceptance of deviation from the terms of the contract, then the party is said to have breached the contract. Breach of contract leaves the nonperforming party which is Mr. Thomas open to a claim for damages by the other party which is the seller in this case. The most common remedy for breach of contract is money damages. Here accusations of fraud can arise as some sort of contractual situation is involved in this case and there was a deliberate misrepresentation made by the party represented by Thomas who did not reveal that his corporation did not exist at the time and there were no assets which could be taken over. However, it cannot be denied as well that fraud does not occur when a person promises to do something and then changes his mind later and does not do it. A fraud can occur when one party makes a representation about a fact and knows that representation is false and forces another party to rely on his misrepresentations, as a result of this reliance, loss is suffered for which there is a legal remedy. In this case, Jennifer relied on Thomas who may or may not meant what he said earlier. Most likely remedy in this case is a suit for damages as there is a formal contract. But the problem is that Thomas has no company or corporation in existence, hence, the question arises if Jennifer will be liable to pay the fine or not. When a purchase defaults upon a contract for the sale of real estate, the seller has the right to recover the difference between the contract price and the market value of the property at the time of the breach. However, the seller has no right to recover the expenses incidental to ownership pending the resale of the property (Zitesman A J, 2005). The seller’s damages may be ascertained by comparing the contract purchase price to the value of the property at the time of the breach and the seller has the right to claim in case there is a difference in the price of the property (Zitesman A J, 2005). Even Jennifer can be held liable for the payment of damages on account of errors and omissions, misrepresentations or fraud. As it is stated in the contract if the buyer defaults, the seller can claim the purchase price, however a liquidated damage clause may allow the seller to retain the earnest money deposit (Galaty W F, Allaway J W, Kyle C R, 2002). In this case no deposit of $2,000 was made; hence, the sellers have a complete right to sue Thomas and Jennifer to get a claim of the total purchase price of the property which is $3, 00,000. CONCLUSION The breach of contract is absolutely visible on account of the acceptor; it is recommended that without enquiring and ensuring the concerned person’s ability and capacity for meeting up the demands and requirements, no deal should be taken forward. As in this case, Jennifer should have verified and ensured Thomas’ ability to pay the required amount in accordance with the time allotted. FACTS RELEVANT TO ETHICAL ISSUE One of the aspects of ethical issue which can be considered in the case study is Williams’s careless and casual attitude or over-confidence in his friend Mark whom he met after a very long time. Unnecessary boasting of the company he is working for in order to impress his friend is against the loyalty and honesty which the company expects from their employees. Mark simply stated that he was unhappy with his current job and in shear reflex revealed the company details and forwarded a recommendation letter without enquiring the past details of his friend’s working experience which turned out to be serious thought of consideration in future. ETHICAL ISSUE The prevalent ethical issue in the case is that William has recommended for the job in the company with strong ethics a person who had wrong intentions, had an irresponsible and careless attitude to the reputation of the company and his friend’s reputation in the company as well. William recommended his friend not knowing that he had been checked for fraud earlier, moreover this fact was not revealed while filling in the details of the form. Further the fact that Mark had not been honest to the company he had previously worked for was discovered revealing the accident with the air ticket booking. These facts raise a serious question on Mark’s integrity and William’s responsibility towards ERU. ANALYSIS William has an ethical responsibility to maintain confidentiality in regard to the private information which he has accumulated through various resources formal or informal in his organization. Even though his emotional and sentimental bond with his old friend might have urged him to reveal the inner facts of ERU, yet his professional ethical accountability must have surpassed all other relations. Whether there exists any suitable vacancy for his friend or not, he must have followed a pre-defined procedure which the company has laid for all candidates. Moreover, unnecessary boasting of his company policies and working environment is also against the values and expectations which should be held by a responsible and sincere employee. According to the situation Williams must not have revealed any information about the status of the company. Recommending a name, whose past information has not been duly tracked and traced, is a serious offense against the work culture (Locke J, Barker E, Hume D, Hopkins G, Rousseau J J, 1960) His ethical responsibility deemed William to verify each and every little detail mentioned in the application form before writing down a letter. Moreover, when William came to know about the actual facts regarding his friend, he should have conveyed all the details to the concerned authority apologizing for his casualness and carelessness. William could in future potentially lose his job, if in future Mark is found involved in an illegal activity as he was already been charged in the past with fraud. After all, it is a professional misconduct on account of an employee to engage in any action involving dishonesty, fraud or misrepresentation (Goldman E, 2006). His character is revealed when he states that he kept the $1,200 dollar for air ticket booking which ethically should have been refunded back to the company. Such attitude displays a dishonest, disloyal and untrustworthy character of Mark, who is definitely an unsuitable candidate for an organization which values high ethical norms and standards. CONCLUSION/RECOMMENDATION Few unethical decisions have been taken on the spur of the moment. It is as clear as black and white that such careless decisions could prove to be disastrous in future. It is strongly recommended that no one should recommend anybody on account of faith and trust unless one has strong grounds and complete record of a person’s previous working experience for supporting and favoring any candidate. All past histories of any candidate should be unveiled, not only professional but also personal, no matter how much familiar one is with the candidate. REFERENCES Beale G H, Bishop D W, Furmston P M, 2007, Contract: Cases and Materials, Fifth Edition, Published by Oxford University Press, Locke J, Barker E, Hume D, Hopkins G, Rousseau J J, 1960, Social Contract, Published by Oxford University Press US. Cohen N, McKendrick E, 2005, Comparative Remedies For Breach Of Contract, Published by Hart Publishing. Galaty W F, Allaway J W, Kyle C R , 2002, Modern Real Estate Practice, Published by Dearborn Real Estate Education, pg 178 Goldman E, May 2006, Ethical Issues in Contract drafting, retrieved on 8th November, 2008, http://blog.ericgoldman.org/personal/archives/ethicalissuescontractdrafting.pdf Zitesman A J, Feb 2005, Buyer Breach of Contract, How to protect your seller from Buyer Breach of Contract, retrieved on 8th November, 2008, http://www.columbusrealtors.com/13640.cfm Read More