INSTRUCTIONS
You are to select one question from Part 1 and answer the first question from Part
2 of the following questions and respond to them by attaching your responses within
Assignments. You must write clearly and please space and one-half for your responses.
Times New Roman font preferred, 12 pt. You will receive up to 5 bonus points if you
answer the second question in PART 2.
In responding to these questions, you are to apply the principles we have
discussed throughout the course. Credit is given for correct use of the legal and
philosophical terms we have studied. Be concise and be sure to substantiate your position
with logical arguments that apply directly to the question at hand. Good luck; remain
calm and trust your knowledge. This examination is worth 30 points.
P A R T 1
QUESTION 1
St. Thomas Aquinas asked, “Do we make law or discover law?” When we act for
the common good – act from inside – the “Eternal Law” is received and understood from
within and observed only conditionally: “When humans correctly understand desire, and
act for the good of human nature (food, drink, clothing, shelter, creative activity,
knowledge, friendship, etc.) they are freely enacting observance to the Eternal Law. They
are not making law for themselves – they are discovering it and approaching it for
themselves.”
Aquinas drew a distinction between Natural Virtues and Theological Virtues.
Because ethics apply universally and cannot be changed or modified by law, how do we
apply them to business?
2
The question for you to discuss, is how, as the Chief Executive Officer of a
company, would you apply these principles and virtues to your business model? Be
specific in your discussion addressing business goals and policies such as profit,
employee relations (pay, benefits, family leave) and duty to shareholders, suppliers and
consumers.
QUESTION 2
Immanuel Kant developed the Categorical Imperative Theory; one cannot use
others in a way that results in a one-sided benefit. “When we do something because it is
our moral duty, we are motivated by the thought that, insofar as we are rational beings,
we must act only as this fundamental law of (practical) reason prescribes, a law that
would prescribe how any rational being in our circumstances should act. Whatever else
such a law might be, it is, in virtue of being a principle of reason, true of all rational
agents.”
Discuss one of the following:
As the Chief Executive Officer of a company, how would you apply these
principles and virtues to your business model? Be specific in your discussion addressing
business goals and policies such as profit, employee relations (pay, benefits, family
leave) and duty to shareholders, suppliers and consumers.
OR
What is the difference between being motivated by a sense of duty in the ordinary
sense and being motivated by duty as Kant defines duty? Be specific in your discussion
addressing business goals and policies such as profit, employee relations (pay, benefits,
family leave) and duty to shareholders, suppliers and consumers.
3
P A R T 2
FACTS
Linda is the purchasing agent for ADCO, Inc., which sells navigation and
guidance systems to the general public and the United States Government. ADCO, Inc.
needs to acquire a specific microchip. Linda decides to use both print a social media to
solicit bids to fulfill ADCO, Inc.’s needs.
Linda places the following notice on December 19, 2015:
ADCO, Inc. hereby offers to purchase 1,200,000 “microchip X45-2356”, a
specialty chip used in conjunction with the processing and real time updating of
navigation guidance systems. ADCO, Inc. requires 100,000 chips per month, for twelve
consecutive months, commencing March 1, 2016 and ending February 28, 2017. ADCO,
Inc. will pay $1.50 per chip per month as long as 100,000 chips are delivered to ADCO,
Inc. warehouse located at 18 Fenton Drive, White Plains, New York by common carrier,
on the 15th day of each month. Deliveries made after the 15th day of each month shall
incur a penalty in the amount of $1,000.00 per day for each day or part of a day delivery
is late. Responses by email to Linda.Jones @ADCO.net.
John Sinco, who is the owner and Chief Executive Officer of CHIPCO, Inc. sees
the solicitation placed by ADCO, Inc. CHIPCO, Inc. is a manufacturer of computer chips
and specializes in navigation and guidance microchips. John decides to reply to the
solicitation, as follows on December 29, 2015:
CHIPCO, Inc., 4 Water Drive, Elmsford, New York, hereby accepts
ADCO Inc.’s offer to supply 100,000 “microchip X45-2356”, or its generic equivalent,
on or before the 15th day of each month commencing March 1, 2016 and ending February
28, 2017 at the price of $1.50 per unit chip delivery at 18 Fenton Drive, White Plains,
New York by common carrier, as set forth in the solicitation.
John sends the proposal by email, as instructed.
On December 30, 2015, Linda replies:
Offer accepted, modification rejected in whole.
4
On March 15, 2016, 100,000 X45-2356 microchips arrive at ADCO, Inc.’s
warehouse in White Plains, New York. CHIPCO, Inc. sends ADCO an invoice for the
100,000 chips in the amount of $150,000.00, terms payable upon receipt. ADCO, Inc.
immediately pays the invoice. Each month, April, May, June, and July, the same
procedure is followed.
On August 15, 2016, the microchip order does not arrive. On August 16, 2016, a
major hurricane, Hurricane Debbie, strikes the Northeast leaving the Eastern seaboard of
the United States without electricity until August 21, 2016. On August 23, 2016,
CHIPCO, Inc. delivers 100,000 chips to ADCO Inc.’s warehouse in White Plains, New
York and sends an invoice to ADCO, Inc.in the amount of $150,000.00.
On August 25, 2016, ADCO, Inc. sends payment to CHIPCO in the amount of
$142,000.00. On August 27, 2016, CHIPCO sends an email to ADVO stating that the
$8,000.00 of the invoice remains unpaid and that failure to pay the balance will affect
future delivery and products.
ADCO refuses to pay the remaining $8,000.00 of the August CHIPCO invoice.
On September 15, 2016, CHIPCO delivers 100,000 generic X45-2356A
microchips to ADCO and sends an invoice in the amount of $142,000.00. ADCO
immediately pays the invoice.
On October 1, 2016, ADCO receives a complaint from GEMLIN, Inc., an end
user of the microchip X45-2356 stating that a customer who uses their navigation system
in her car, was guided into a river on a foggy night by the navigation system. A check of
the unit showed that the microchip was a X45-2356A, not the X45-2356.
On October 15, 2016, CHIPCO delivers 100,000 X45-2356A microchips to
ADCO, sends ADCO an invoice in the amount of $142,000.00, which ADCO pays
immediately.
On November 1, 2016, Linda discovers that the X45-2356 has been replaced with
the X45-2356A and immediately sends notice to John that she was cancelling the
remainder of the contract.
CHIPCO immediately brings an action in the New York State Supreme Court,
Commercial Division, Westchester County, against ADCO for damages in the amount of
$600,000.00, four months remaining on the contract at $150,000.00 per month.
5
ADCO counterclaims against CHIPCO claiming that it failed to supply the
microchip specified in the order, deliberately replaced the microchip ordered with a
cheaper, faulty version and did so with malice and knowledge that the microchip
provided was inferior. ADCO further claimed there was never a contract between the
parties as CHIPCO’S counteroffer “supply 100,000 “microchip X45-2356”, or its generic
equivalent” was rejected by ADCO. XADCO claimed $2,000,000.00 in damages
resulting from the inferior product provided by CHIPCO.
CHIPCO responded to ADCO’S claims by demonstrating that ADCO accepted
delivery of both the X45-2356 microchip and the X45-2356A and paid invoices until
August, 2016, pursuant to the contract CHIPCO maintains to have been in full force and
effect.
QUESTION 1
Identify each of the elements to a contract, including those relating to contract
acceptance and rejection in the factual setting above. Once you identify the elements,
support your answer using the fact pattern above and the contract terms we have studied.