Mohammed wants to sell his old laptop, which he has owned for a year and a half. Having bought a new one, he took the old laptop to a reseller. The laptop is in good condition, but there is a problem in the battery. The laptop will only work for two hours before a recharge is needed.  Mohammed didn’t mention this problem to the reseller, so as to sell the laptop at a higher price.

Contributed by a business student.

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About John Hooker

T. Jerome Holleran Professor of Business Ethics and Social Responsibility Tepper School of Business Carnegie Mellon University

One response »

  1. John Hooker says:

    In a sales transaction there is a warranty of merchantability: an implied promise that the merchandise is fit for the purpose for which it is sold. Breaking this promise because one can get away with it is not generalizable, because if it were standard practice, one would not get away with it. However, the laptop is probably still usable as a laptop, although less conveniently than a new one. So there seems to be no violation of implied warranty.

    One might argue that failing to mention the degraded battery is deceptive. Does a failure to mention this cause the buyer to believe that the battery is in good shape? Probably not, because people know that laptop batteries degrade, particularly a laptop reseller who deals with laptops all the time.

    This is a case in which we can ethically say caveat emptor. The seller is not presupposing trust that would not exist of all sellers did the same. The buyer doesn’t trust the seller to give him a laptop with a battery like new. There is probably no trust at all involved, because a laptop reseller knows that used laptops are a risk and is willing to buy them at face value anyway. If the buyer is a person who is an amateur at computers, and would not buy one without trusting the seller to explain any problems the laptop may have, then the situation changes. The seller should be up front about the battery.

    I don’t see utility as a factor, because what one party gains, the other loses.

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