Discussion Board 11

Ethical Issue in Purchase and Sale Agreement

Please response to the discussion below. As always, your responses should be well-written, free of spelling or grammatical errors, properly edited, contain appropriate references for any works cited in your post, and should contain both facts of the case and your own thoughts relating to the matter and your answers to the questions. This is fo a discussion board could be between 300 to 500 words.

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Mark just graduated from college and works for a company as a “business broker.” The company Mark works for, BRU, represents clients interested in either buying or selling businesses. Mark’s job involves arranging these sales.

Rev. Jones is a retired minister who recently formed a nonprofit corporation to aid troubled youths. Rev. Jones has retained BRU to arrange for the purchase of a small manufacturing plant that he wants to convert into a recreation center. He desires to work with Mark because he formerly attended his church and he trusts him implicitly.

Mark’s supervisor, Georgia, has assigned him the task of negotiating a deal for Rev. Smith’s organization. Some of the machines at the manufacturing plant are in very poor condition and would require $100,000.00 to repair. However, Rev. Smith does not need the machines for the recreation center and plans to remove the machines after the purchase anyway.

The seller’s asking price for the building is $1,000,000 and is requiring a $250,000 down payment. Unfortunately, Rev. Jones’s nonprofit organization can only raise $150,000 for the down payment.

Georgia has looked into the situation and believes the seller would reduce the asking price to $950,000 and accept a $150,000 down payment if the seller can be led to believe that repairing the machines is important to Rev. Jones. Thus, Georgia instructs Mark to mislead the seller. Mark is told to insist–with a straight face–that either the seller repair the machines or drop the down payment and asking price.

Mark is uncomfortable with this strategy, both for the sake of honesty and because Rev. Jones has not approved it. Yet, as a new employee, he wants to please his supervisor. Mark has come to you for professional and ethical advice. How would you advise him?

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