Reference no: EM13961003

Maximillian Snell is having a very bad Monday at his “pre-owned” car dealership, Maximillian Motors. Known county-wide for his “eye-catching” (some would say obnoxious) television advertisements (with staged customers proclaiming “Thanks a million, Maximillian!”) Snell is having a difficult time attracting and retaining an effective and reliable sales staff; in fact, not a single salesperson has appeared for work on Monday. The only employee who does shows up for work that day is his secretary of three years, Daisy Martinez, whose responsibilities include processing “tax, title and tag” paperwork after the sale.

Business is slow that Monday, with only two “window shoppers” appearing on the lot from 8:00 a.m. to 2:00 p.m. Famished, and eager to try out the new Italian restaurant down the street, Snell instructs Martinez to tell any prospective customers he will return at 3:30 p.m.

When Snell returns at 3:30, he asks Martinez whether any potential customers visited the lot in his absence. Daisy beams with pride, and says “why yes, Max, there was a young couple who came by right after you left. They wanted to buy that red BMW sedan on the front row, and I knew business was slow, so I went ahead and sold it to them. The contract is here on my desk. Aren’t you proud of me?!”

Curious, Maximillian examines the contract. It describes the red BMW sedan, and includes the signatures of both purchasers, as well as Daisy’s signature (indicating “Daisy Martinez, for Maximillian Motors.”) The contract price is $21,000. Maximillian’s face reddens as he heads for the car inventory purchase price records on his computer. Computer records reflect that he purchased the car at auction last Wednesday for $28,000, and that his established retail price for the car was $31,000. When he confronts Daisy with the facts, she bursts into tears, saying “please boss, don’t fire me, I’ve made a terrible mistake!” Daisy is inconsolable, but that is irrelevant to Snell; he is not exactly in the mood for consoling.

Through her tears, Daisy indicates that the couple will return at 5:30 p.m. to take possession and ownership of the car; they have gone to their bank to retain the $21,000.

Is Snell legally obligated to sell the car to the couple? From an ethical standpoint, should the couple agree to pay at least Snell’s cost for the car ($28,000?)