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Mike, a sales rep for a major computer software company, knows his company does not plan to maintain updates for the software. When selling the software package to customers he implies the company will continue to support the software. Mike could create a ________________ legal problem.

A. Truth-in-lending
B. Breach of warranty
C. Equal employment opportunity D. Situational ethics
E. Tying agreement

1 Answer

4 votes

Final answer:

Mike could create a fraudulent misrepresentation legal issue by misleading customers about the software's support timeline, which is distinct from tying sales, a practice that can be anticompetitive.

Step-by-step explanation:

When Mike, a sales representative, implies continuous support for software that his company does not plan to update, he could create a fraudulent misrepresentation legal problem. This involves misleading customers to believe in the longevity of the software's support, which can have serious legal repercussions. This issue is separate from tying sales, where consumers are forced to buy an unwanted product to obtain the product they do want.

Tying sales can be seen as anticompetitive, particularly when the products are only loosely related and the purchase of one is made contingent on the other without any reasonable basis. These sales strategies can become subject to antitrust scrutiny, especially when coming from companies with substantial market control or those engaging in anticompetitive practices, as was the case in the famous Microsoft lawsuits.

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