Please read this case and use the questions at the end for the basis of the discussion.

It wasn't the money that bothered Nathan so much as the fact that he felt cheated and humiliated. He had decided to purchase a new hybrid vehicle for his computer consulting business after he noticed an ad for the exact car he wanted offering a "factory finance" deal of 4% over 4 years. Nathan considered himself to be a "techie" and he wasn't comfortable haggling over car prices. But, he went to a local dealership and negotiated a purchase that would give him payments of $522 per month over 48 months -- an amount he could afford.

The salesperson told Nathan that he would be able to pick up his car in a few days: she would call him. When he didn't hear anything for several days Nathan called the dealership and the salesperson told him that there was a small problem with the finance application: she would fax him a new application which he could fax back.

When no application arrived, Nathan called again and was told that they had already straightened out the problem, but that another salesperson had accidentally sold Nathan's car. They would get him an exact duplicate within a few days and would call him to pick it up.

A week later, Nathan called and was told that the replacement vehicle that arrived had the wrong equipment on it, but that a correct replacement was already on the way: they would call him. The delays dragged on for a month until the sales person called and told Nathan to come in that day and pick up his new vehicle.

When he arrived at the dealership, the salesperson told Nathan that because this was a different vehicle from the original, with a different serial number, a new purchase agreement and finance contract would have to be signed. She explained to Nathan that they had to change some of the numbers around but that if he checked carefully, he would see that the payments were still exactly $522 per month over 48 months. Nathan was so excited about the new car, he couldn't sign fast enough.

On getting home, Nathan checked his contracts and found out that the dealership had increased the price of the car by almost $1,400 but that they had lowered the finance rate to 2%, giving him the exact payments he had originally agreed on. Later that day, Nathan noticed in the newspaper an ad for the same car manufacturer announcing a new incentive: starting that day, finance rates of 2% over 48 months.

Out of curiosity, Nathan phoned the head office of the car manufacturer and asked what would happen if someone had a car on order at the old rate of 4% but it was not available until after the new rates of 2% had started. The head office told Nathan that such a purchaser would be entitled to the new lower interest, and the resultant savings of hundreds of dollars.

Nathan felt that he had been duped by the car dealership. At the same time, he felt embarrassed to confront the salesperson. He had actually signed a new contract for the car he owned, without really checking it or asking questions. But by delaying the delivery and changing the contract, the franchise had profited by an additional $1,400 that otherwise would have gone to Nathan. What should he do?

1. Comment on the ethics of the car dealership. Is a genuine error likely in this case? What makes you think so? Who is the car dealership stealing from?

2. Considering that he is receiving the original payments that he contracted for, is Nathan being ripped off? Comment on how he could have protected himself. What is his legal position now?

3. Does Nathan have an ethical obligation to pursue this matter? Explain.

4. What would likely be the position of the car manufacturer? Explain.