Question

The modern theory of contracts is sometimes called the theory of joining wills which simply means, when parties make an agreement they are joining together to complete an endeavor of mutual interest. The problem with all contract that endure over time is that not all potential challenges can be anticipated. The idea of joining wills is that parties will attempt to seek accommodations to advance their mutual interest, so long as the return on the invested activity pays off. Based on this, first identify a sunk cost investment you have made or one that your company has made. Then explain how might the investment be, or has been, subject to post-investment holdup? And finally suppose your employer took note of your decision to get an MBA and appointed you as the interim director for new department. Shortly after you completed your degree, your company merged with another company and the new department you were managing was abolished? Is this a post investment holdup and is there a financial injury?

Answer 1

Answer:

Suppose our employer took note of our decision to get an MBA and appointed us as the interim director for new department. Then shortly after I completed my degree, our company merged with another company and the new department I was managing was abolished.

Yes, this is a post investment holdup and it had financial injury as well.

This is post investment holdup because the investment had been carried out but the benefit or interest is on hold and we did not get the expected benefit from the investment in MBA degree. We have invested for the MBA degree to get the management responsibility of my department, but till the time I completed my MBA degree, the department is no more exists due to merger of the company. So my investment did not result in the expected benefits for me. Hence the investment is on holdup.

It had the financial injury as well, because the MBA degree investment call for fees pay for the degree, but I did not get the responsibility for the department, hence no increase in salary/compensation for me, hence there is a financial injury as well. Though the degree will be helpful in future, but as per current scenario, it results in the financial injury.