Week 6 Assignment

36.11
Business Ethics John A. Goodman was a real estate salesman in the state of Washington. Goodman sold to Darden, Doman & Stafford Associates (DDS), a general partnership, an apartment building that needed extensive renovation. Goodman represented that he personally had experience in renovation work. During the course of negotiations on a renovation contract, Goodman informed the managing partner of DDS that he would be forming a corporation to do the work. A contract was executed in August between DDS and “Building Design and Development (In Formation), John A. Goodman, President.” The contract required the renovation work to be completed by October 15. Goodman immediately subcontracted the work, but the renovation was not completed on time. DDS also found that the work that was completed was of poor quality. Goodman did not file the articles of incorporation for his new corporation until November 1. The partners of DDS sued Goodman to hold him liable for the renovation contracts. Goodman denied personal liability. Was it ethical for Goodman to deny liability? Is Goodman personally liable? Goodman v. Darden, Doman & Stafford Associates, 100 Wn.2d 476, 670 P.2d 648, Web 1983 Wash. Lexis 1776 (Supreme Court of Washington)

Was it ethical for Goodman to deny liability? Is Goodman personally liable?
Answer:
Goodman sold an apartment building to DDS, the apartments needed renovation and Goodman represented that he had experience in renovation work. During the course of negotiations on a renovation contract, the president informed the partnership that he would be forming a corporation in order to limit his personal liability. A contract contained an arbitration clause was executed. However, the work was not completed on time and was of poor quality. After the apparent default, the president filed articles of incorporation and a