Legal Environment 4th Edition by Jeffrey Beatty, Susan Samuelson

Exercise 2

ETHICS Hector works in Zoey's importing firm. Zoey overhears Hector on the phone say, "OK, 30,000 ski parkas at $80 per parka. You've got yourself a deal. Thanks a lot." When Hector hangs up, Zoey is furious, yelling, "I told you not to make a deal on those Italian ski parkas without my permission! I think I can get a better price elsewhere." "Relax, Zoey," replies Hector. "I wanted to lock them in, to be sure we had some in case your deal fell through. It's just an oral contract, so we can always back out if we need to." Is that ethical? How far can a company go to protect its interests? Does it matter that another business might make serious financial plans based on the discussion? Apart from the ethics, is Hector's idea smart?