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Contract View Of Bussiness-Business Ethics-Lecture Notes, Study notes of Business Ethics

This lecture handout is about Business Ethics course. It was provided by Prof. Deepanwita Subbaratnam at Bundelkhand University. Its main points are: Contract, View, Business, Duties, Consumers, Relationship, Duty, Contractual, Theory, Manufacture

Typology: Study notes

2011/2012

Uploaded on 08/04/2012

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%%#  !!#"   "   (  "
#<"  !# &

"%0$'''A'''
*$      "  #!
       ## ##!"  
  # ##!& 9 
   !"  $ #"    $##   I#
C & ##$ 
! "    # # 
!   !&'$$$##
 " !$!"
 #$!&
               $  
    !  !  !# 
     & 9 0   $ # -! 3.    
<F!$$+*!
  #          !  -.  
$#("-.! &6##
!$<   $"         
0!#J ##
7 !!#     ##!$   
##  !& A#   $   ## !!# # #  
""&
9#!3 # #$
<$# #+
&    !     $ ## #     
 &
3& @!   ## !  #
!&
2& @!     
#&
   <       F 
6#<! &F"0 !#"#
 !      $#(" 6# 
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manufacturers--claims which appeal, in different ways, to our desire to minimize harm, our ideal of justice, and our commitment to taking responsibility for the choices we make. LESSON 35 THE CONTRACT VIEW OF BUSINESS' DUTIES TO CONSUMERS According to the contract view of the business firm’s duties to its customers, the relationship between a business firm and its customers is essentially a contractual relationship, and the firm’s moral duties to the customer are those created by this contractual relationship. When a consumer buys a product, this view holds, the consumer voluntarily enters into a “sales contract” with the business firm. The firm freely and knowingly agrees to give the consumer a product with certain characteristics, and the consumer in turn freely and knowingly agrees to pay a certain sum of money to the firm for the product. In virtue of having voluntarily entered this agreement, the firm then has a duty to provide a product with those characteristics, and the consumer has a correlative right to get a product with those characteristics. The contract theory of the business firm’s duties to its customers rests on the view that a contract is a free agreement that imposes on the parties the basic duty of complying with the terms of the agreement. We examined this view earlier (chapter 2) and noted the two justifications Kant provided for the view: A person has a duty to do what he or she contracts to do because failure to adhere to the terms of a contract is a practice that (a) cannot be universalized, and (b) treats the other person as a means and not as an end. Rawls’ theory also provides a justification for the view, but one that is based on the idea that our freedom is expanded by the recognition of contractual rights and duties; an enforced system of social rules that requires people to do what they contract to do will provide them with the assurance that contracts will be kept. Only if they have such assurance will people feel able to trust each other’s word and, on that basis, to secure the benefits of the institution of contracts. We also noted in Chapter 2 that traditional moralist have argued that the act of entering into a contract is subject to several secondary moral constraints: 1. Both of the parties to the contract must have full knowledge of the nature of the agreement they are entering. 2. Neither party to a contract must intentionally misrepresent the facts of the contractual situation to the other party. 3. Neither party to a contract must be forced to enter the contract under duress or undue influence. These secondary constraints can be justified by the same sorts of arguments that Kant and Rawls use to justify the basic duty to perform one’s contracts. Kant, for example, easily shows that misrepresentation in the making of a contract cannot be universalized, and Rawls argues that if misrepresentation were not prohibited, fear fo deception would make members of a society feel less free to enter contracts. However, these secondary constraints can also be justified on the grounds that a contract cannot exist unless these constraints are fulfilled. A contract is essentially a free agreement struck between two parties. Because an agreement . cannot exist unless both parties know what they are agreeing to, contracts required Q@sity.com knowledge and the absence of misrepresentation. Because freedom implies the absence of coercion, contracts must be made without duress or undue influence.