I’ve started this blog as a meditation on ethics in the context of business. Having suffered through a number of books on the topic, and having found them entirely unsatisfactory, I'm left with the sense that anyone interested in the topic is left to sort things out for themselves. Hence, this blog.

Status

I expect to focus on fundamentals for a while, possibly several weeks, before generating much material of interest. See the preface for additional detail on the purpose of this blog.

Thursday, November 25, 2010

Source of Obligation

In the context of a transaction, two parties consent to take separate actions, each for the benefit of the other, and the expectation of gaining the benefit from the action of the other party becomes a motivation to perform the action that is expected of them by the other party. In this way, the actions are no longer independent of one another: one party would not be motivated to act for the benefit of the other were it not for the benefit they expected to receive in return.

One problem of this approach is in the focus on expectation. An individual is not obligated to undertake an action simply because it is expected by another – the obligation arises from a promise: an indication of intention that is presented to the other, with the intention that they would accept it as true and govern their own actions accordingly.

When conflict arises in the context of obligation, the blame is assigned to one of two parties. If the individual who presented the promise fails to act according to the terms of the promise, they are clearly in the wrong. If the individual who accepted the promise made assumptions about the terms of the promise (up to and including the notion that a promise had been communicated), the other party is not held accountable. Much argument arises from the conflict over what each party understood to be promised, and it merits consideration at a later time.

It’s also worth noting that there may be obligation that exists outside the context of a transaction: when one party indicates to another an intent to undertake an action without the necessity of the other party performing them any service in return, this is deemed to be a unilateral promise.

A unilateral promise is not enforceable as a contract. Because the actor received no obligation in return, the second party is not entitled to compensation for the failure of the actor to perform the action. However, if the second party undertook an action based on a unilateral promise, and suffered damage as a result, it can reasonably be argued that the action of the first party, in making the promise, caused harm to the second party, whose actions were based on expectations created by the first. This seems in the nature of deception or dishonestly rather than neglect of an obligation.

Considering the consequences of both bilateral and unilateral obligations, the common element seems to be an indication on the part of one party that is taken as earnest by the second, such that the future action of the second party is dependent on their expectation that the first party will act on the intentions they have communicated.

This seems to be around about way of suggesting that obligations arise from promises, regardless of whether any promise is made in return, and that the source of harm inherent in neglecting obligation arises from the actions that others may take on the belief that a promise is made in earnest.

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