Question

Sophia negotiated a contract with Pete under which she would buy his company for $10 million plus the amount of the company's outstanding debt (approximately $1 million). But when Pete sent a draft of the contract, it stated that the purchase would be $10 million less the company's debt. What is Sophia's ethical obligation to Pete. Should she tell him about the mistake? What Life Principles would you apply in this situation?

Answer 1

Sophia’s ethical obligation is to inform Pete about the mistake made in the draft of contract.

What is an ethical obligation?

An ethical obligation refers to a moral requirement to follow a certain course of action.

Hence in this case, Sophia’s ethical obligation is to inform Pete about the mistake made in the draft of contract and correct the same.

Should she tell him about the mistake?

Yes, she should tell him because both party in a contract are expected to be transparent and disclose facts to one another.

What Life Principles would i apply in this situation?

I will apply the life principles of transparency.

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