Catholic Economics 101: Must a Seller Point Out Obvious Defects?

Choosing_the_Wedding_Gown_vicar_of_wakefield_mulreadyAccording to Catholic teaching, the seller must be honest about the sale of his goods as a matter of justice. He must not deceive the buyer or claim the goods are more than they really are. The seller must also inform the buyer of known defects that would have an impact on the value of the product in question.

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The question arises if the seller is obliged to point out obvious defects that are clearly visible such as a dent in the fender of a car.

The answer given by medieval moral theologians is commonsensical. Economist Odd Longholm summarizes their conclusions:

“A seller is obliged to reveal hidden defects in goods if they are likely to Subscription5.2cause danger or loss. He is not obliged to point out manifest defects because this might make it difficult to obtain a price that is just considering the defect. The seller may look to his own indemnity by withholding information about the defect.” (Odd Langholm, The Merchant in the Confessional: Trade and Price in the Pre-Reformation Penitential Handbooks, (Leiden; Boston: Brill) 2003, p. 55.)

In other words, a seller who insistently points out an obvious defect might deprive himself of the just price that is due to him. The buyer seeing the defect knows what he is buying and thus need not be advised.

  • Hermonta Godwin

    I dont think that I agree. If the defect is obvious then pointing it out should not affect the price. Next, the question of a just price is left undefined here. Is the just price simply the highest price that one’s conscience allows them to collect?

    • Thomas Zimmerman

      If one was selling a house, he would not go around pointing out all the defects of the house; the house might be worth a good deal perhaps because of it’s location, or it’s history, style, ect. But if the person was to point out every minor defect it would naturally make the buyer feel he should pay less, though it would be worth more. Just price is not something that can be defined for all situations. The guiding moral principles of Justice, Temperance, Prudence and Fortitude have to be applied individually to each circumstance.

      • Hermonta Godwin

        But if the just price cannot be defined, then on what basis can it be appealed to here? Next, I have no problem with the moral principles that you list here but unless they have are defined objectively, the situation will reduce down to everyone doing what is right in their own eyes.

        If one is unwilling to define what a just price is for a situation, then how can one argue against the proper price being “What someone is willing to pay for it”?