A new instructor called at 8:12am the other morning absolutely beside himself. He had walked into his 8am class with Midterm 3 ready to distribute to the students. All was fine, so far. It was not until he and the TA were handing out the exams that they realized that Version C was printed with the correct answers in bold font.
He realized that

• he did not have enough exams without the misprinted version.
• the students were stressed out and he needed to rapidly make a clear and fair decision.
• the office (and photocopier) didn't open until 9am, across campus

"Exam canceled. Everyone gets 100%."

Did he do the right thing?
1. This is now going to completely overshadow any previous nightmares of showing up to SATs in pajamas or showing up to your oral defense and seeing your parents in the front row.
2. His decision certainly eliminated any impact on the students. The students had prepared for this exam and had shown up ready to take it. Some might have been counting on this exam to raise their average from previous exams. By calculating this exam as 100%, every student's grade will be raised. If he had just removed it from the gradebook, the students who were 'counting on' this exam to raise their grade would have been denied the opportunity to raise their grade.
3. As long as he has multiple ways of assessing student learning, needing to abandon an exam (due to a fire alarm, power outage, instructor PDF mishap, TA misplacing exam papers, etc.) should still leave enough information about student content mastery to assign final grades.