Question no.:

What actions Widget Corporation should take to behave in an ethical manner and why you think this is the most ethical way to proceed. And other actions that Widget Corporation could take but they are less ethical.

CASE DESCRIPTION

You have just been hired by Widget Corporation and, unfortunately, this company has just had a

suit filed against it in Texas. The President of Widget Corporation, your new boss, is going to

hire an attorney to litigate the case, but wants to first understand the potential issues of the

case. He has asked you to evaluate the situation and identifying and discussing

both the procedural law and the substantive law issues the company will face. He also wants to

act in an ethical manner no matter what the legal results are, so he has also asked you to

include your own personal assessment of the ethical way to proceed in handling the case.

Widget Corporation, which manufactures and distributes widgets, is located in California and

incorporated in Delaware. Widget Corporation received an order for widgets from a customer in

Texas. Because it did not have any employees in Texas, Widget Corporation subcontracted a

local handyman, Lyle, to deliver and install widgets for the Texas customer. As part of the

contract for services, Widget Corporation provided Lyle with specific instructions as to how the

widgets needed to be installed. The contract was signed by Widget Corporation and by Lyle.

On the day of installation, the Texas customer inspected and accepted the delivery of the

widgets from Lyle. The Texas customer then instructed Lyle to proceed with the installation. Lyle

proceeded to install widgets. He installed nearly all of the widgets to spec, but then realized he

was running late for his son's soccer game. He quickly installed the last widget, but could not

get the bolts to tighten to spec. Since he was in a rush, he did not realize the last widget was the

wrong widget. He gave up and rushed out the door to his son's game. One week later, an

employee of the Texas customer was injured by the last widget Lyle installed. The Texas

customer has now filed a suit for $70,000 against Widget Corporation and the president of

Widget Corporation in Texas federal court for the injury sustained by its employee.

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