Week 5 Flashcards
What are the main Legal developments of consumer rights (3)
- Caveat Emptor (“Let the buyer beware”)
- Due care principle
- Strict product liability
Caveat Emptor (“Let the buyer beware”)
The buyer alone is responsible for ensuring the quality of the goods.
Due care principle
Customers interests still vulnerable but should be protected as sellers know more.
Strict product liability
The seller has legal responsibility to the buyer, even if not negligent.
Normative arguments for consumer rights
- Utilitarianism - More consumer rights allows for greater maximum happiness of the total population.
- Deontology (Kant’s Ethics of Duty) - Sellers must do whatever they can to allow customers to make their own decisions without being lied to.
- Virtue- Should you really make money by cheating or lying to customers?
Deontology
Kant’s ethics of duty
How do consumers ensure product safety
Society must depend on the conscientious efforts of business to promote consumer safety.
How can product safety be ensured? (3)
- Monitoring the manufacturing process
- Providing written information
- Investigating consumer complaints
Product quality
- Does the product do what it claims to do?
- Does it manage reasonable customer expectations?
Problem with labelling and packaging
Sometimes difficult to interpret/notice
Price gouging
Taking advantage of consumers in times of crises or high demand by charging excessively high prices
Predatory pricing
When a company prices their products significantly lower than its competitors to reduce competition.
Advertising
What is the point of advertising? –> To persuade people to buy
Consumer sovereignty
The idea that customers control the market
Dependence effect
The idea that companies control the market and “create” wants through ads.
