Assignment task: Ethics and Compliance in Action
Jerry, who was in the process of opening a new small business in Connecticut, ordered an expensive new computer system from ABC Computing. As part of this transaction, ABC presented Jerry with a contract of sale. The contract was written on lightweight paper that was difficult to read. The signature line was on the bottom of the first page, but there were more contract terms on the reverse side of the page. On the reverse side, under the heading "Warranty Service" was a provision that disclaimed all implied warranties and stated that any dispute that might arise between the parties would be resolved by arbitration in California (where ABC is headquartered). Jerry signed the contract without reading the reverse side. The computer system was defective and never worked correctly. Jerry wants to sue ABC Computing but cannot afford to go to California to do so. Is it ethical for businesses who deal with consumers and other less- sophisticated parties to "hide" contract terms under misleading headings, in small print, deep in a website or on the reverse side of the contract? If not, what sorts of organizational checks need to be in place at companies like ABC Computing to avoid putting consumers or less-sophisticated parties in that position?