Business Law Today, Comprehensive 10th Edition by Roger LeRoy Miller

Exercise 5

Case problem with Sample Answer-Ethics and the Law. Prudential Insurance Co. of America has a company guideline not to change the amount of a salesperson's commission once a client has been quoted a price for insurance. Despite this principle, in order to reduce the quoted price for insurance offered to York International Corp., Prudential cut the fee that it paid to a broker. A competing broker, Havensure, LLC, filed a suit, arguing that the reduced quote caused it to lose York as a potential customer. Is a company's violation of its own policy unethical Is it a basis for legal liability Explain.