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Deliberate breach of contract?

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Mike,

If right and wrong is in the eye of the beholder, so is the concept of whether or not an intentional contract breach is ethical. I see a signed contract as a formal agreement to perform, something that in the past was done with a handshake. I have also been taught that my word is my bond, and if I promise to do something, to do otherwise is wrong.

Not everyone believes that, and it may not be taught in Harvard either, but perhaps many of the scandals of the last decade or so may have been avoided if such a system was still taught as it was in the past.

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Mike,

If right and wrong is in the eye of the beholder, so is the concept of whether or not an intentional contract breach is ethical. I see a signed contract as a formal agreement to perform, something that in the past was done with a handshake. I have also been taught that my word is my bond, and if I promise to do something, to do otherwise is wrong.

Not everyone believes that, and it may not be taught in Harvard either, but perhaps many of the scandals of the last decade or so may have been avoided if such a system was still taught as it was in the past.

"My word is my bond" makes sense when we're talking about transactions between individuals, but what sense does it make when we're talking about transactions between complex organizations, like a government and a corporation? Whose word is supposed to be the bond? The agent of the organization? If that's the case, then the government is immoral quite often, since it will not hesitate to disavow a contract made by an agent who didn't follow instructions. Think about the Christian Doctrine. I hope Harvard Business School does not teach "my word is my bond" as any kind of general business principle.

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Mike,

If right and wrong is in the eye of the beholder, so is the concept of whether or not an intentional contract breach is ethical. I see a signed contract as a formal agreement to perform, something that in the past was done with a handshake. I have also been taught that my word is my bond, and if I promise to do something, to do otherwise is wrong.

Not everyone believes that, and it may not be taught in Harvard either, but perhaps many of the scandals of the last decade or so may have been avoided if such a system was still taught as it was in the past.

Dw - if a contractor has a contract with both his employees and with the Government, and in order to honor one contract he has to break the other, what is the right thing for the contractor to do?

The Government contracting process provides remedies (although as I mentioned in a previous post, these remedies often never truly make the Government whole, and others have pointed out how Government T4C's don't really make the contractor whole either) and both the Government and the contracting parties agree to play within those rules. As long as both parties are truthful with each other and operate in good faith, I don't see how ethics enter into the equation. If a contractor tells me he has to walk off a project because he'll go bankrupt otherwise I will not be at all happy about it, but I wouldn't consider his action unethical, but I'd likely terminate the contract for default, apply excess reprocurement costs, etc. Similarly, it isn't unethical for the Government to terminate a contract for convenience.

Going back to my cell phone example, are you saying you think it's unethical to break a cell phone contract early?

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