Ethics in Action.

Essay by billyg October 2005

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Rex Roofing formed a contract with the O'Neill's for installation of a new roof on their house. The price of the contract was $2500. After the work had begun, Rex realized that he was not charging enough for the job and informed the O'Neill's that he could not complete it. The O'Neill's agreed to pay a higher price of $3200. We will, through the analysis of prior case precedents, state our opinions as to whether it was ethical for Rex to refuse to do the job at the original price, and if the O'Neill's are ethically obligated to pay more than the original contracted price.

Case Precedent #1

Drennan v. Star Paving Co., 51 Cal. 2d 409

[L. A. No. 25024. In Bank. Dec. 31, 1958.]

William Drennan, plaintiff, a licensed general contractor, submitted a bid on the "Monte Vista School Job" for a paving job. Before Drennan could submit the bid, Drennan asked for bids from subcontractors to do the paving work.

Of all of the subcontractors who submitted bids, Star Paving Co. came in with the lowest bid. Star Paving Co. bid the paving job at $7,131.60. Mrs. Johnson, Drennan's secretary, repeated the bid to make sure that the bid amount was correct and was confirmed by Mr. Oppenheimer who was Star Paving Co.'s construction engineer. Drennan compiled his costs, $317, 385.00 including Star Paving Co's bid on his proposal to Monte Vista School. Drennan told Star Paving Co that if awarded the project, they would be awarded the subcontract. On July 28, 1955, Drennan was awarded the project. The next morning, Drennan stopped by Star Paving Co. and found out that the bid amount was a mistake and the job had to be done at $15,000. Drennan told the subcontractor that the work had to be...