Documents Uncovered After the Exxon Valdez Oil Spill in Alaska

question 55

Essay

Documents uncovered after the Exxon Valdez oil spill in Alaska revealed that Exxon could have used double-hulled oil tankers that would have prevented the spill,but the cost of refitting their fleet of single-hulled tankers was considered too high.Exxon determined that the cost of cleaning up an oil spill would be less than the cost of refitting the ships,thus increasing shareholder value.Several years after the oil spill,however,Exxon was fined billions of dollars for the spill.How do the costs of the cleanup and the fines pertain to a discussion of maximizing shareholder value and ethical responsibility?

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Definitions:

Performance Date

The specified day by which a contractual agreement, task, or duty must be completed.

Liquidated Damages Clause

A contract provision that specifies a predetermined amount of money one party will pay to the other if they breach certain clauses of the contract.

Mitigate Loss

Actions taken to reduce the severity, seriousness, or painfulness of something, particularly in the context of financial losses.

Foreseeable Loss

A loss that a party ought reasonably to have seen coming as a possible outcome due to their actions or inactions.