Read the Ace Heating and Cooling scenario. Then answer the listed questions below in complete sentences.
Ace heating and cooling scenario (Focus on Ethics):
AceHeating andCooling sells air conditioners. One unit, the Freezy, has a fair market value of $300. During a heat wave,Ace sells three Freezys for $1,000 to the following:
- Breanna, single mom with poor credit, who can’t afford to pay cash for an AC unit. Breanna signs a contract to pay $1,000 on acredit plan, with an additional $500 in interest and financing fees.
- Barry Bigshot, investment banker, who knows the price is way too high but who is far too important to waste his time drivingaround town trying to get a better deal.
- Glamour Café, a fancy restaurant with an upscale clientele, whose AC went out in the middle of the lunch rush. The manager isdesperate to get the place cooled down before people like Barry Bigshot come in for the evening happy hour.
- Shady Rest Nursing Home, a business with a narrow profit margin. The manager isn’t happy about the price, but old people arevery vulnerable to heat, and she’s afraid that her patients’ health could be compromised by any delay in getting AC.
- Under UCC 2-302, who has the best chance of getting out of the contract due to unconsionability?
- The symbol for justice features a woman wearing a blindfold illustrating that the law should be applied the same way regardless of who the parties are. Does the UCC rule seem to contradict this? Which approach do you think is more ethical?
- Note that both Glamour and Shady Rest are businesses, and courts rarely find that contracts between two businesses are unconscionable. The rationale is that a business is a sophisticated entity, familiar with transactions and able to protect itself. Do you think Glamour and Shady Rest are in a comparable position in regard to this contract? Why or why not?