an odd CR from gmatclub

diebeatsthegmat wrote:Ethicist: In a recent judicial decision, a contractor was ordered to make restitution to a company because of a bungled construction job, even though the company had signed a written agreement prior to entering into the contract that the contractor would not be financially liable should the task not be adequately performed. Thus, it was morally wrong for the company to change its mind and seek restitution.
Which one of the following principles, if valid, most helps to justify the ethicist’s reasoning?
(A) It is morally wrong for one party not to abide by its part of an agreement only if the other party abides by its part of the agreement.
(B) It is morally wrong to seek a penalty for an action for which the agent is unable to make restitution.
(C) It is morally wrong for one person to seek to penalize another person for an action that the first person induced the other person to perform.
(D) It is morally wrong to ignore the terms of an agreement that was freely undertaken only if there is clear evidence that the agreement was legally permissible.
(E) It is morally wrong to seek compensation for an action performed in the context of a promise to forgo such compensation.

My answer choice is D.

Explanation: The company can seek restitution only if the prior contract is not permissible in the court of law. This choice states that if the agreement is legal it is morally wrong to ignore the terms in the contract.

What is the OA

First of all, this is an LSAT-style LR question, called a "Principle" question, a type that does not appear on the GMAT, so this is more for fun than for real GMAT prep. That being said:

The Ethicist argues as follows: Because they signed an agreement not to sue the contractor, it's immoral for the company to go ahead and sue them anyway.

(A) We are not told that the company's abiding by the agreement is necessary for the moral judgment ("only if" implies necessity in formal logic -- this is one of those things that's tested on the LSAT and not the GMAT).
(B) We are not told anything about the contractor's ability to make restitution.
(C) There is no evidence that the company "induced" the contractor to screw up, nor is this the basis of the ethicist's reasoning: it's the signed agreement.
(D) Very tempting, but again, the "only if" means that the legal permissibility of the signed agreement is a necessary condition of this moral judgment, and the ethicist does not claim that.
(E) This is correct: the "context" described is that the construction took place under an agreement not to sue. Thus, the situation above is accurately described: While working under an agreement not to sue, the contractor performed an "action" -- screwing up -- and the comapny is morally wrong to "seek compensation" -- that is, sue -- for this action.