Question

You have sent the rough draft of a contract to your outside counsel to prepare a formal document. When the draft of the contract comes back, you notice that the terms of the contract are exactly as you had indicated but the attorney has added many other clauses which cause you some concern. One group of clauses you know is very one-sided (they benefit you but not the other parties to the contract). When you ask about them, your attorney says that even though they are one sided, they are to protect you from litigation. Another group of clauses seems very harsh. When you ask about them, your attorney says that even though they may be unenforceable, the clauses will deter the other party from suing you because of the expense.

Q1) The Ethical actor in the scenario is the company for which the formal contract document is prepared, as it needs to take the decision regarding acceptance or rephrasing of the contract.

Q2) The stakeholders in the scenario include the company for which the contract is being made, the attorney preparing the contract, the other parties in the contract.

Q3) The assumptions about the problem include -

Q4) Issue. In one sentence, identify the issue for this problem.

Q5) Values in Tension In three or four bullet points, identify the values in tension.

Answer 1

Q1) The Ethical actor in the scenario is the company for which the formal contract document is prepared, as it needs to take the decision regarding acceptance or rephrasing of the contract.

Q2) The stakeholders in the scenario include the company for which the contract is being made, the attorney preparing the contract, the other parties in the contract.

Q3) The assumptions about the problem include:

There are two assumptions that the company may face litigation and can be sued. Hence, two clauses are added. The one-sided clauses are introduced assuming that it will protect the company from litigation. A harsh clause is introduced which though the unenforceable, assumption is that it will deter another party from suing the company to avoid the expense.

Q4) Issue. In one sentence, identify the issue for this problem.

Preparing and finalizing an ethically correct contract and taking the critical decision to include or not include a clause which is one-sided and another clause which appears too harsh.

Q5) Values in Tension In three or four bullet points, identify the values in tension.

The values of tension include the following:

• Framing a contract ethically
• Ensuring the integrity of the company
• Ensuring the contract is mutually beneficial and not one-sided.
• Respect the dignity and basic rights of both the parties