Question

According to the contract view of businesses' duties to customers, what are the four basic duties a firm has to its customers? Why are they necessary? What objections do critics raise about this theory?

Answer 1

Major duties of a business towards the consumers include

• The duty of no coercion
• The duty of non disclousre of consumer information
• The duty of never misrepresent a product to a consumer
• The duty of complete compliance with reliability, service life and after sales service claims

These are necessary to build trust with consumers and to retain a long term relationship ensuring customer loyalty. The objections against the theory include

• Manufactuerers or producers barely meet the consumers though the theory assumes they interact regularly
• Hidden disclaimers which somehow shifts the burden of business duties on to the consumers leaving businesses free from any moral or legal obligation
• Assumption of completely informed consumers is barely ensured and sellers are mostly well informed relative to consumers. Thus consumers have to rely on sellers for product knowledge.