One-Time Commercial Transactions

In the consideration of business relationships, it seems to me that I left several loose threads in regards to isolated transactions. While it is reasonable that there are expectations in an ongoing relationship, and that violations of these expectations are violations of trust by virtue of their being grounded in experience, it is not clear whether these same ethical standards apply to a one-time (or first-time) commercial transaction.

Primarily, the nature of most transactions is voluntary. It may be argued that a person is "forced" to enter into a transaction against their will, but my expectation is that this is highly unusual, and the logic behind such an assertion highly dubious. In the context of business, both buyer and seller enter into the transaction voluntarily and may opt-out prior to obligating themselves to the transaction.

The obligation arises in the promise to perform an action in exchange for the promise of another party to perform an action in return. Before promises are exchanged, no obligation exists. It can even be argued that there is a period after the exchange of promises, but before either party has acted, in which the transaction can be voided - though this merits consideration.

The motivation of entering into a transaction is to obtain something of value. The fact that obtaining this objective requires the actor to provide something of value in return is a necessary condition of the transaction - the value each party receives from the other is their motive for undertaking an action at all.

The primary source of ethical consideration in transactions occurs when one party fails to deliver on its promise to the other party after the point at which they become obligated by the promise or initiation of action inherent in the transaction. A seller who accepts payment and does not deliver goods has acted unethically, as they have obtained the payment based on a false promise. A buyer who accepts goods and does not deliver valid payment has likewise failed to deliver on their ethical obligation.

The notion of failure to deliver an agreed-upon value when the value provided is a currency payment is relatively straightforward - though there is one wrinkle in the case of methods of payment whose value is received at a later time (the payer may tender counterfeit currency, a bad check, a fraudulent payment card, etc.) So long as the payment is accepted by another party (generally, a bank into which it is deposited), it can be said to be validated, and the obligation fulfilled unless it is later discovered to be fraudulent.

The notion of failure to deliver an agreed-upon value when the value provided is a material good or service is less straightforward. This is generally experienced from the buyer's role, in which an item received either does not have the qualities they expected, or does not deliver the ultimate value they expected (in that a good is used as a resource in later actions).

The ethical responsibility of the capability of an item to deliver the expected value is not entirely borne by the individual who provided the item, nor by the individual who accepted it, but is subject to the communication that occurs between them prior to entering into the transaction agreement.

It reasonable to hold the provider of the item responsible for the items failure to deliver any value that was communicated to the recipient in an unsolicited manner. If the provider indicates "this is a gold ring" and it later turns out to be brass, he has deceived the recipient into providing greater value than would have been given if the true nature of the item were known.

It is likewise reasonable to hold the provided responsible for providing complete and valid information in instances where expectations are communicated. If the recipient asks if the brass ring is gold and the provider says "yes," he has likewise provide false information. Even if he claims not to be aware, when he knows the ring to be made of brass, he has misled the recipient.

However, it is not reasonable to expect the provider of an item to know the interests or desires of the recipient that are not communicated to him, as he has no sense of the recipients beliefs about the quality of the item, nor any knowledge of the use to which the recipient intends to put the item, until it is communicated to him by the recipient.

In this sense, the recipient bears responsibility for initiating communication related to the item he will receive. There is no ethical transgression on the part of the provider for failure to provide information that has not been requested by the recipient - and the suggestion that the provider "should have known" what the recipient might have wanted to know bears little validity in the majority of instances.

The exception to this would be in the instance of a repeated transaction. In such instances, the provider of the item can reasonably be expected to understand, even without explicit communication, that the recipient expects the item to have the same qualities as a functionally identical item that was previously received from the same provider.

As a final note, it is worth mentioning that the notion of "caveat emptor" has largely been inverted in the competitive marketplace. The sellers of items often guarantee satisfaction while being unaware of the buyer's expectations, and refund purchases without arguing the reasons. This can be attributed to the seller's interest in retaining the buyer's business (outside the immediate transaction) or avoiding damage to their own reputation, which is a matter that bears separate consideration. However, the motivation of the seller to assume this responsibility is external to the immedaite transaction.