Via e-mail, John Colglazier, commercial account manager at Don Hinds Ford, Inc., offered to buy twenty Ford Explorers from Beau Townsend Ford Lincoln, Inc., and to pay with a check. Beau Townsend agreed. Colglazier then received an e-mail, purportedly from Jeff Columbro, Beau Townsend’s commercial sales manager, asking for a wire transfer instead of a check. Don Hinds picked up the Explorers and wired the payment. Unfortunately, the wiring instructions had been sent by a hacker who had infiltrated Columbro’s e-mail account and then vanished with the funds. On learning what had happened, Beau Townsend asked for the Explorers to be returned. Don Hinds refused. Beau Townsend filed a suit in a federal district court against Don Hinds. Without making findings of facts, which would require a trial, the court issued a summary judgment in the defendant’s favor. [Beau Townsend Ford Lincoln, Inc. v. Don Hinds Ford, Inc., __ Fed.Appx. __, 2018 WL 6181643 (6th Cir. 2018)] (See Signature Liability.)
(a) Apply the IDDR approach to evaluate whether, in executing the deal for the Explorers, the parties acted reasonably or failed to take ordinary care.
(b) From an ethical perspective, did the court meet its duty to determine which party was in the better position to avoid the loss in this case? Explain.
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