Ed Johnson is a real estate manager and investor. Nearly 20 years ago, Ed embarked on a partnership with Jack Jones to improve and operate an office building in New Haven, Connecticut. The building and land are owned by James Jason. James gave Ed and Jack a 20-year lease; at the end of 20 years, the lease would terminate and the property would revert to James. Pursuant to their partnership agreement, Ed and Jack each provided 50 percent of the capital for improvements to the office space and received 50 percent of allocable net profits. Though he no longer needed Jack's capital for the project, Ed suspected that Jack would be interested in participating in the mall development. However, it was not clear whether James made the offer to renew the lease solely to Ed or to the partnership. Because Jack had not been invited to dinner and his name had never been mentioned, Ed believed that the offer was made solely to him.
1. Does Ed have an ethical responsibility to inform Jack of the opportunity to renew the lease? Why not? Explain.
2. Does it matter that the renewal offer for the longterm lease was initially raised in a dinner conversation between Ed and James? Explain.
3. Should Ed be free to sever relations with Jack with regard to the property? Consider that Ed has managed the property and no longer needs Jack's capital. What competing values does his dilemma involve? Explain.