Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 4

A customer requested certain sophisticated tests on equipment he purchased from your factory. Such tests are very expensive and must be performed by a third party. The equipment was tested as requested and met all of the industry standards, but showed anomalies which could not be explained. Though the problem appeared to be very minor, you decided to inspect the unit to try to understand the test data-a very expensive and time-consuming process. You informed the customer of this decision. A problem was found, but it was minor and was highly unlikely ever to cause the unit to fail. Rebuilding the equipment would be very expensive and time-consuming; moreover, notifying the customer that you were planning to rebuild the unit would also put your overall manufacturing procedures in question. Should you fix the problem, ship the equipment as is, or inform the customer?