It is perfectly legal to use the other party's or the customer's lack of knowledge to your advantage in business. What's not legal is to commit fraud: that is, to knowingly misrepresent, or lie, about some important feature or characteristic, with the intention that other party will base it's decision or action on your lie. If there as misrepresentation, then there may be grounds to rescind the contract or seek damages. However, if the other company was perfectly honest in everything they said and your ED simply made a bad decision (e.g. didn't make sure he understood your business's needs or what features or capabilities you needed), then nothing legally was done wrong. Other businesses do not need to look out for their customer'slack of knowledge or flawed decisioon making process.