Timmco Inc is a publicly traded corporation located in Denton

Timmco, Inc. is a publicly traded corporation located in Denton, Texas that makes and sells high pressure
industrial spraying equipment used in all sorts of commercial liquid spraying applications. It prides itself on top
quality and promotes its products as “100% made in the USA”.
Sales have been declining recently due to competition from lower priced competitors and Timmco is looking for
ways to reduce costs. One option under consideration is to find a new source for the high-pressure valves used
in its products. These valves are complicated mechanisms that operate under very high internal pressure. If the
valve was to burst, it would spray pieces of metal in all directions and pose a significant hazard to anyone
standing nearby including the operator of the equipment. Timmco currently has a contract to purchase 1,000

valves a year at $2,500 per valve from Blagg Industries, a small privately owned business located in Boone,
North Carolina. The contract has been in place for three years and has two more years to run.
Blagg Industries has a dozen employees. Timmco is its primary customer. If Blagg Industries loses Timmco’s
business, it will have to lay off employees and might even go out of business.
Timmco is considering outsourcing the valves from Sanco, an overseas supplier in the country of Slawrovia,
instead of buying valves from Blagg Industries. The Sanco valves only cost $1,000 each, but are known to be
of lower quality than the Blagg Industries valves and are more likely to burst. Sanco can supply these valves at
such low cost because they pay their workers, including children, less than the equivalent of $5 per day and
work them long hours in hot, dangerous conditions.
Slawrovia is a poor country, but it has a large government bureaucracy and there is a lot of red tape involved in
getting approval to export manufactured goods to other countries. In fact, it might take more than a year for
Sanco and Timmco to obtain the necessary approvals for Sanco to export the valves to Timmco. Fortunately,
the CEO of Sanco is related to the Slawrovia Minister of Commerce and has told Timmco that the necessary
approvals can be obtained in less than a week if Timmco makes a $20,000 “gift” to the Slawrovia Minister of
In addition to finding a new, low cost valve supplier, Timmco plans to increase sales by running a new
marketing campaign that focuses on their commitment to American made quality. The tagline will be “Made in
the USA by Americans, for Americans.”
You are a high-level executive at Timmco. Analyze the legal and ethical issues presented by the Timmco
scenario. Your legal and ethical analysis should include breach of contract and remedies, negligent torts,
product liability, the Foreign Corrupt Practices Act, and deceptive advertising and should incorporate a
discussion and application of one or more of the ethical theories from Chapter 4 of the course textbook
Business law: The Ethical, Global, and E-Commerce Environment.
Your legal and ethical analysis should,
Analyze breach of contract and remedies
Analyze negligent torts
Analyze product liability
Analyze the Foreign Corrupt Practices Act
Analyze deceptive advertising
Incorporate a discussion and application of one or more of the ethical theories from Chapter 4 of the course
textbook Business Law: The Ethical, Global, and E-Commerce Environment

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply