Ethical dilemma/Ilegal contract
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Case Study
Please read the below scenarios and answer the questions.
Scenario 1: Ethical Dilemma
You are the city manager of a medium sized city which has experienced an economic downturn in recent years. Your commercial tax base has eroded, requiring you to either cut services or raise fees and taxes on the residents. Unemployment is also growing as a result of fewer businesses located within your city. You have been approached by a developer that would like to build a business park on city land. The developer asks for property tax reductions over the first five years of the project, and promises at least 500 new, permanent jobs as a result of the construction. The developer has also asked for a no-bid acceptance, meaning that you must give her the land without publicly seeking alternatives or other developers to counter her offer.
The project will provide a great deal of benefit to your community, but a no-bid deal is contrary to efficient, open, and fair government practice. The developer says that she will withdraw her offer if you require an open bid process. What should you do?
Scenario 2: Illegal Contracts
Suppose CCP Management, Inc., entered into a property management agreement with Andrew Hoganmuller and several companies which Hoganmuller operated.
CCP now contends that Hoganmuller and the related companies failed to pay amounts due to CCP as the manager of rental properties under the property management agreement. The principal object of the agreement was the performance of acts for which real estate broker and property management licenses were required. CCP, however, did not at any time possess a real estate broker license or a property management license. CCP contends it is entitled to recover compensation for services for which no licenses were required regardless of whether other services that it provided required such licenses.
Was this a legal contract? If it is an illegal contract, is it void or voidable in whole or in part? Does the doctrine of severability apply? Are there any additional facts that we would need to find out in order to resolve this dispute?
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Solution Summary
The answer to this problem explains an ethical dilemma and an illegal contract . The references related to the answer are also included.
Solution Preview
!. The developer has asked for property tax reductions over the first five years and has promised at least 500 new permanent jobs. The point of contention is that you must give her the land without publicly seeking alternatives or other developers to counter her offer. According to the case the no-bid deal is contrary to efficient, open, and fair government practice.
The developer is asking for a sole source contract from you. Such a contract can be awarded only if there is compelling urgency, industrial mobilization, or only one firm can do the work. Even though there is economic downturn and there is increasing unemployment, there is no compelling urgency or industrial mobilization. Other legal reasons for awarding sole source contract are national security, authorization by law, or an international agreement. These reasons do not ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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