Oxford Management Inc is a management consulting firm.It has hired Jerome as its agent to buy new computers for its offices across the country.Jerome owns 10 computers, which are ideal for Oxford's needs.Oxford is a valued client, and he decides to sell the computers to Oxford for a price which is $10 000 less than their market value.As agent for Oxford, he decides to buy the computers for this price from himself.Which of the following is TRUE?

Question

Quizplus · Accepted Answer

While it is generally not appropriate for an agent to buy goods from themselves as it creates a conflict of interest, in this case, Jerome may buy the computers from himself with Oxford's informed consent. As long as Oxford is fully aware of the situation and agrees to the sale at the reduced price, there is no conflict of interest. Therefore, option B is correct. Option A is incorrect as there may be situations where an agent may buy goods from themselves with full disclosure and consent. Option C is incorrect as being personally satisfied that the price is fair is not enough to avoid a conflict of interest. Option D is not relevant to the situation as there is no mention of an alternative supplier. Option E is incorrect as the sale can be carried out with Oxford's informed consent.

Oxford Management Inc Is a Management Consulting Firm