Doctrine of Caveat Emptor

In general, it was believed that the business have the duty responsibility to provide products that fulfill the claims that the business explicitly made about the products on the markets to their consumers. Consumers form expectations about the products they are going to buy based on those claims and thus, leads them enter into a buying contract. The company has the duty to provide consumers what they pay for. However, consumers today were assumed to be wise, knowledgeable and doubtful.

The doctrine of caveat emptor, meaning “let the buyer beware”, proclaims that consumers were entitled to buy at their own risk unless a warranty is given by the sellers.

It was because that the consumers nowadays have their absolute right to choose what they want to buy freely; therefore, they were expected to take the responsibility to inspect and check any potential buying carefully based on their own judgment and were asked to accept the risk that the products have the possibility to be either defective or unsuitable to their needs.

Products with this information prevented sellers or manufactures from any lawsuit regarding to consumers’ negligence and carelessness during the buying or using processes that the consumers might get injured when they use the products they bought. Anyhow, the doctrine of caveat emptor is not designed to protect the sellers/manufacturers who trying to concealed any hidden defects or making misleading claims about the quality or condition of the products they sold that may amounting to fraud and bad faith of the company so consumers must clearly know their rights and be alert to any possible scams.

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Nevertheless, product safety is an ethical obligation nowadays, so the products were assumed to be safe for ordinary use all the time. Product liability comprises “all claims or action brought for personal inquiry, death, or property damage caused by the manufacture, design, formula, preparation, assembly, installation, testing, warnings, instructions, marketing, packaging, or labeling of any product” according to Section 102(2) of Uniform Product Liability Act.

Although the consumers are still required to check upon buying, the responsibilities of sellers and manufacturers upon products safety were increased even more in this modern trend. Hence, there are few ethical theories regarding to product liability can be discuss here. The social contract theory that connected modern moral with political theory was first introduced by the 17th century British philosopher Thomas Hobbes. He had came out with a view of psychological egoism which held that one’s actions are motivated by self-desires.

Everything one does is solely prompted by the desire to better one’s situation, and to satisfied as many of one’s desires as possible. Human beings are eternally appetitive and truly only concerned with their own interests. An action that seems selfless might still contains the element of selfishness. For example one who donates to the charity might still enjoy the feeling of control over others at the same time. Therefore, the theory of psychological egoism sustained that eventually the most important factors which driving the human’s acts is their own interests.

On top of this founding, Hobbes had developed the social contract theory. It was one of a kind of the normative theory. The social contract theory can be related to the “rule-ethical-egoism”. It indicated that an individual is well off to live in a moral-based society than a society with no moral rules. Without the existence of moral rules, people were threatened by others’ selfish interests at a continual risk no matter their property, prestige, families, or even their lives.

The selfishness of each individual will therefore prompted to an adoption of a fundamental set of rules for a more civilized world. These rules prohibited any criminal acts like lying, robbing or killing that might threaten individual safety. In other words, these rules will safe guard any individual from getting harm by others’ selfishness once the rules enforced. Human beings as selfish creatures would keep trying to take advantage of others and therefore, a policing agency must be set up to punish those who break the rules.

Individual relies on one another to keep the agreements but a third party is still needed to supervise the situations so as to ensure that no one is breaking the rules or harming each other. In need of governance, individuals agree to form a government that was empowered to enforce the rules and regulations upon those who go against the agreements by giving up some of their social power. The social contract theory holds that manufacturers/sellers’ duty to provide products that are safe to use is determined by the agreements between the sellers and consumers.

It consisted of the implicit and explicit agreements that supervise the liability between manufacturers/sellers and consumers which stated that a business have the obligation to provide the products that fulfill the claims that the sellers explicitly made about the products’ safety level to the consumers or the claims that the sellers implicitly made when marketing the products which its safety level is well known. Express warranty claims the facts about the products and become part of the sales agreement while implied warranty claims that the goods sold must fit to the ordinary use.

Social contract theory is supported by two important philosophies. First, utilitarian stated that society overall happiness will be increased by complying with the agreements that made between manufacturers/sellers and consumers; second, Kantian said that it is deceiving and disrespecting others if the agreements are fail to be kept. According to the social contract theory, there are some duties that the manufacturers/sellers should accomplish. The first one is to obey the conditions of sales agreement. It indicates the products offered have to be safe for original purpose.

Second, products’ related information such as reliability, maintainability of the products and etc must be disclosed. The third is to prevent any misleading information about the products that may confuse the consumers and the fourth is to avoid the use of force and excessive influence. The due care theory holds the idea that the consumers and manufacturers/sellers cannot be considered as equal and the consumers’ interests are susceptible to be harmed by the manufacturers/sellers who have better knowledge and expertise of the products that the consumers don’t have.

Therefore besides the obligation of sending products that fulfills the implied and express claims the sellers made about the products, they also have the obligation to exercise due care to protect consumers from being injured by the use of the products that the seller can reasonably foresee even if such responsibilities had been explicitly disclaimed and consumers had agreed to the disclaimer.

Thus, the manufacturers/sellers were held to be liable for the consumers’ cost of injuries if they failed to practice the due care. The theory also claimed that the manufacturers/sellers practice adequate supervision to the consumers only when they take reasonable steps to prevent any harms that they can predicted the use and any other possible misuse of products may have on consumers. Manufacturers/sellers are required pay extra attention to the product’s designs, choice of product materials, anufacturing processes, quality control during productions, and the cautions, labels and instructions attached to the products. Failure to exercise these steps has breached the moral obligations of due care, manufacturers/sellers are considered to be negligence. However, manufacturers/sellers are not morally negligence if the consumers are injured by the products but the harm was the one that couldn’t be predicted or prevented before the purchases.

Manufacturers/sellers are also not morally negligence if they fulfilled all the sufficient steps to protect consumers and make sure that the consumers are aware of any irremovable risks of the products. For example a car manufacturer is not morally negligent when consumers misuse the cars that the manufacturer produced unless the manufacturer allow any excessive risks of the cars’ design that the consumers aren’t expected to know about and prevent it from happening.

Unfortunately, it is difficult to determine whether the due care towards product safety has been exercised by the manufacturers for the consumers’ sake and how far the manufacturers must go to assure the products’ safety. The due care theory emphasize more on manufacturers’ conducts rather than the products’ quality; therefore according to the legal law, consumers must have sufficient evidences that the manufacturer failed to exercise due care rather than the evidences of products’ defects. The social cost theory is the fundamental of the doctrine of strict product liability.

In accordance to the social cost theory, manufacturers will have the legal responsibilities to pay the costs for any damages or injuries of the consumers which brought about by the defects in the products which made the products excessively dangerous even though the manufacturers had practiced all the due care that related to the products’ designs, manufacture, quality control and packaging and had warned the consumers of every risks related to the products’ usage which the manufacturers can reasonably predicted.

Under the doctrine of strict product liability, manufacturers are liable to all the damages even if they have not been negligent in allowing the defects to happen. However the strict liability is not an absolute liability because the products have to be defective and the consumers have to be accountable in exercise care. Besides, there are some criticisms about the strict product liability. It was asserted that to the manufacturers, the doctrine was relatively unfair.

It was persisted that a business that had taken every reasonable precautious in order to prevent and get rid of any possible defects that might damage consumers’ interests, shouldn’t be held liable for the defects that they have no ability to prevent it from happening. It seems to be unjust for the manufacturers to be held for the defects that happened notwithstanding they had tried their best efforts to guard against them. On the other hand, the strict product liability is justified by the utilitarian.

The first argument is that the utilitarian proponents that the businesses will only make their extreme efforts to ensure the product safety with the promotion of such policy like strict product liability. This was due to the facts that they know they will have to liable for any damages and injuries defects, so they will try their best efforts to intensify the safety of products. The second argument is that the utilitarian contended that it will be best that the manufacturers to bear the costs of damages and injuries due to defects of the products.

The manufactures will usually raise the products’ prices in order to cover the costs of injuries. These costs will then directly spread among all the consumers on the market rather than falling on a single individual which can be said as a kind of insurance plan. The social cost theory is a theory that explained the manufacturers’ obligation to provide products that are safe to use rather than a theory that specified on who should bear the costs of injuries. The manufacturers owned absolute obligation to provide products that are free from defects according to the doctrine.

These theories had so far enforced the business to perform their part to ensure that the products that they provide to the consumers are fit for the purpose, at the same time, safe for use. However in the real world, there was numerous numbers of cases which had been brought out for judgments. For example, a seventy-nine-year-old lady Stella Liebeck successfully sued McDonald’s for compensation. She was suffered from a third degree burns on her thighs and buttocks which she may need to require a skin grafting surgery and may leave her permanent scars because of a cup of McDonald’s hot coffee that spilled on her.

At first, Liebeck intended to ask to the McDonald’s for a claim for the medical charges that she spend and also an additional sum of money for her suffering but the company rejected, so the lady brought up the case to the court. Lawyers who represented McDonald’s claimed that the coffee wasn’t unreasonably hot and Liebeck should responsible for her own injuries. However, the court jury refuted McDonald’s claims using two significant points. First, the McDonald’s coffee was served at 185 degrees Fahrenheit which was both undrinkable and even more dangerous than the consumers could expect.

Second, McDonald’s had received over seven hundred complaints for its burning coffee before Liebeck brought up the case to the court. Although McDonald’s had actually printed the cautious label on the coffee cups to remind the consumers that the coffee is hot and also changed the lids into tighter lids after getting complaints from its consumers, but the efforts seem functionless because in the Liebeck’s case, she spilled the coffee when she held the coffee cup between her legs and trying to pry the tighten lid.

Based on these points, McDonald’s was held liable for the compensation damages because the company hadn’t done enough to warn its consumers and was liable for an additional punitive damages as a warning to the fast-food chains. McDonald’s had violated the due care theory because the company hadn’t done enough in warning the consumers regarding the hot coffee. There was a case regarding to the resistoleros in Central America. A large number of homeless children were found sniffing some glue produced by the Harvey Benjamin Fuller Company which called Resistol adhesives.

They were addicted to the intoxicating but dangerous fumes of the glue. Child-welfare concerned to the issue and urged the company to resolve the problem by adding a noxious oil to the glue in order to discourage abusers but Fuller refused. Fuller seems to have challenged to the criticism with its brand that dominated Central America and its good-citizen image. However the issue had become even more irritating because now Fuller must argue with the dissenting stockholders inside and protestors outside during its annual meeting.

Fuller therefore announced that the company will stop selling Resistol in Central America but the matters turned out to be worsen because the protestors turned their jubilation into anger when they found that Fuller never intend to stop selling Resistol in Central America after few months. Instead of selling to the small-scale customers in Honduras and Guatemala, Fuller now sells large tubs and barrels of Resistol to the industrial customers in neighboring countries.

Although the company had taken other steps to stop the abuse of Resistol by altered Resistol’s formula and developed other substitutes, but the actions were said to be mere image polishing because Resistol is still available to the children in other countries. In applying the doctrine of strict product liability in this case, Fuller had violated the manufacturers’ obligations by continuously supply Resistol in the market with the knowing that the products will harm the society.

They should pull out the products from all the countries. There was also a case regarding to the skateboard scare. Colin Brewster’s sport shop had the briskest business ever since the craze of skateboard arrived at the River City. Many of the youngsters in the city got themselves a skateboard from Brewster’s sport shop. Brewster was informed by the River City consumer committee few weeks later that the skateboards were proved to be unsafe to the consumers with sufficient statistical support.

The numbers of youngsters injuries resulted directly and indirectly from the use of skateboards was shocking, but Brewster claimed that it wasn’t his responsibility for the issue because it’s not about the safety level of skateboards it’s about how the youngsters are using them. Brewster also stated that he is just a retailer instead of manufacturer, however, the committee expected him to be responsible on this issue as a retailer. The committee also attacked Brewster that his advertisement on television advocated dangerous sport actions to the public without warning the youngsters not to imitate the actions without special guidance.

Brewster held that parents are liable on this issue for being irresponsible when their children get injured for attempting to try out those actions in the advertisement. Anyhow, the committee asked him to take the necessary steps to settle the problems which including cutting down the advertisement. Brewster refused. Brewster was exercising the doctrine of caveat emptor in this case that he proclaimed that consumers are responsible for their own risks. However according to the social contract theory, Brewster should warns his consumers about the potential dangers of skateboarding before buying the skateboards.

Brewster had violated the social contract theory so he was held liable for the costs of injuries from his consumers. Concluded the theories and cases above, the businesses have the obligation to manufacture and sell the products that are safe for use to the consumers and society while the consumers should acquire related information before making a purchasing decision in order to avoid such product safety problems. Both parties are liable to responsible for this issue. Bibliography 1) Burnett, J. (2006). Product Liability.

Retrieved 2nd October 2011 from: http://www. referenceforbusiness. com/encyclopedia/Per-Pro/Product-Liability. html 2) Fieser, J. (2009). Ethics. Retrieved 30th September 2011 from: http://www. iep. utm. edu/ethics/#SSH1b. i 3) Free Books Online. (2011). The Due Care Theory. Retrieved 1st October 2011 from: http://free-books-online. org/management/business-ethics/the-due-care-theory/ 4) Free Books Online. (2011). The Social Costs View of the Manufacturer’s Duties. Retrieved 2nd October 2011 from: http://free-books-online. rg/management/business-ethics/the-social-costs-view-of-the-manufacturer%E2%80%99s-duties/ 5) Friend, C. (2004). Social Contract Theory. Retrieved 30th September 2011 from: http://www. iep. utm. edu/soc-cont/ 6) Gray, J. W. (2011). Moral Issues Related to Consumers. Retrieved 29th September 2011 from: http://ethicalrealism. wordpress. com/2011/05/16/moral-issues-related-to-consumers/ 7) Hasnas, J. (2010). The Mirage of Product Safety. Retrieved 29th September 2011 from: http://faculty. msb. edu/hasnasj/GTWebSite/SafetyFinalDraft. df 8) Investopedia. (2011). Caveat Emptor. Retrieved 29th September 2011 from: http://www. investopedia. com/terms/c/caveatemptor. asp#axzz1Z5iIVFCP 9) Owen, D. G. (1996). Product Liability and Safety: Cases and Materials. NY: The Foundation Press. 10) Shaw, W. H. & Barry, V. (2007). Moral Issues in Business 11th Edition. CA: Wadsworth, Cengage Learning. 11) The Free Dictionary. (2011). Caveat Emptor. Retrieved 29th September 2011 from: http://legal-dictionary. thefreedictionary. com/caveat+emptor