Governance Regulation and Ethics - Essay Example

? Governance Regulation and Ethics By of Governance Regulation and Ethics Introduction There are government rules and regulations that govern consumer transactions. These rules are meant to protect consumers from exploitation by unscrupulous manufacturers and suppliers. This means that government intervenes in the contractual freedom of parties and imposes regulations on the dealing between suppliers or manufacturers and consumers. This is premised on the fact that the manufacturers have a higher bargaining power as compared to the consumer and in such a position the consumers are vulnerable and exposed to exploitation (Halbert, Ingulli 2003, p.94). Consumer transaction the seller is well informed and consumer on the other hand are ignorant thus the need for the government to impose some form of control on consumer transactions. The governments through legalisations impose regulations which govern the business dealings and any business must be conducted with the confines of the law. Features in the movie and chapter 8 The right to know First in conducting business the business world is required to perform disclosure. This in the perspective of the consumer is the right to know. It is important so as to protect consumers from personal harm which includes economic loss and physical injury. The manufacturers are bound to disclose some information to consumers so that the consumers are able to make informed choices. The right to know is an individual right premised on the freedom of choice and freedom of contract. If a business person lies to a consumer in regard to the choice made by the consumer, then the business person denies the consumer the freedom of choice. This in essence is a manipulation of the consumers’ decisions and thus violates their individual rights. Moral philosophers opine that an individual with all the relevant information is responsible for his decisions whether they were mistakes or not. On the other hand those who withhold relevant information to decision makers are accountable to any harm arising from such a decision made without the relevant information. Relevant information is necessary for economic interest of the decision maker. A good example is where the consumer is informed about the quality of a certain product. In this case the consumer is able to compare the quality of the various brands and at the same time bearing in mind the prices of the various brands. The consumer is able to choose a quality product at reasonable price in such a case (Woodroffe, Lowe, 2010 pp. 78-79). Regulations of quality standards- consumer health and safety The government ensures that the economic rights of consumers are protected by ensuring that consumer are offered adequate and complete information as discussed above and that they are also offered reasonable contract terms. However the government may find that regulations relating to disclosure are not enough to protect the interest of the consumers, it may take further step to impose regulations on quality of products and services. The government regulations in form of quality standards include: imposing minimum educational requirement and also licensing professional suppliers, imposing the standards for the practices and procedures of all sorts in business, specifications for the services and goods, and a combination of any of the above standards of quality. The various governments attempt to ensure enforcement of the above quality standards by inspections, licensing, reviews, and approvals of final products before they are released into the market is to ensure that they are safe for the consumers. The government have imposed such quality standard on various industries which include the food industries and textile industries. Regulation of trade practices – South Africa The general rule is that under commercial law applicable in many countries and general principles of contract the seller is liable for any misrepresentation made to the consumers. However there is an exception to this general rule. The business men are only responsible to for lies and not secrets. Thus the consumer or purchasers cannot claim a right to know the secrets. Thus the buyer in this case is guided by the caveat emptor rule which require the buyer to take the reasonable precautions before entering into a contract of sale. The buyer has to take the initiative to request for particular information and if such information is not furnished then he can decline to buy the goods or services. However the Government of South Africa has imposed regulations through legislations which go beyond the general principles of contracts and commercial law applicable and may require the seller to disclose even the information regarded as secrets. Thus the business people are responsible for both lies and secrets. The buyers on the other hand have a right to know even if they don’t request for information on the regulated area from the sellers. Such regulations on disclosure are premised on the fact that the buyers don’t have the opportunities to negotiate with the sellers for the relevant information thus the consumers do not receive the information necessary for them to make decisions which protect their rights and also promote their interests. It is important to note that business people are liable for such lies if only such lies were in effect a misrepresentation to a person. Secondly such person must have relied on the lies and lastly he suffered loss or harm as a result of such lies. The governments in imposing the regulations rely on the right to know as they do not want to interfere with the corporate decisions. The regulations imposed in this area of disclosures are encompassed in the general fair dealing regulations. Fair dealing is a broad core concept in regard to consumer relationships. It incorporates a states completion law and also ensures the disclosure obligations imposed by the government in pursuance to the right to know. Fair dealing also addresses issues of contract in consumer transactions where fair dealing under the contract terms doesn’t protect consumers from injury and legislature comes in to give a remedy to the consumers. The fair dealing also includes very intrusive legislations which protect consumer safety and health. The competition law of South Africa has also established Trade Commission which is charged with the duty of curbing the unfair and deceptive trade practices that affect commerce. This is an example of the law that protects consumers from unfair trade practices which are likely to cause them to act to their own detriment. The broad power conferred to this commission is a very important element of the regulatory scheme. Disclosure obligations under fair dealing regulations are strictly rules imposed by the governments to protect consumers in absence of negotiations by the seller and buyer (Furmston, Chuah, 2010, pp. 152-155). This may take various forms. The most important is regulation relating to misleading advertisements. Misleading advertisements are prohibited in South Africa. However comparative advertising is permitted though it is subject to some regulations. Misleading advertising can be described as an advertisement which in any way including the way it’s presented is likely to deceive a person or any person and which because of its deceptive nature is likely to injure or cause damage to the person relying on it. South African Commission on trade practices is generally charged with preventing deceptive trade practices and which are similar to those of federal trade practices commission of US and they are: any false written or oral representation about products or services offered; any misleading claims in price, sale of any systematically defective products and services without adequate disclosure. The South Africa Commission on trade practices in dealing with the misleading advertisement focuses on whether the advertising agency has a reasonable basis for substantiating the claim made in the advertisement. However the terms of reference of South Africa commission on trade practices may have different terms of reference from the European Union and the United States. Comparative advertising can be defined as a form of advertising which expressly or impliedly identifies the goods or services offered by the competitor. The government of South Africa just like the United States and EU has taken further steps to impose regulations on quality of products and services. The government regulations are in form of quality standards. These include; imposing minimum educational requirement and also licensing professional suppliers, imposing the standards for the practices and procedures of all sorts in business, specifications for the services and goods, and combination of any of the above standards of quality. Conclusion It is important for the government to put in place regulations that ensure consumer is protected from manufacturers who have a higher bargaining power. If the freedom of contract was left to rule then consumer would find themselves in an awkward situation where manufacturers would take advantage of their power to manipulate the consumers. The governments should put in place measures that ensure the consumer have accurate relevant information at their disposal. The governments should further ensure that the consumers are protected from poor quality and hazardous goods and services. Bibliography Allen, Ricky. 2001.Business law and ethics. United States. Wayne State University Press. I97-199 Cheeseman. Henry. 2007. United states. Pearson prentice hall. P 209-213 Nelson, Brian. 2006. Law and ethics in global business. United States. McGraw Hill Professional. p 97-99 Halbert. Terry, Ingulli Elaine. (2003) Law & Ethics in the Business Environment. United States. Cengage learning. p94 Wylie, R. (2003) Communication technology and its effects on cultures . United States. Cenange learning. 57-59 Woodroffe. Geoffrey, Lowe Robert (2010). Woodroffe and Lowe’s Consumer Protection Law and Practice 8th ed. London. Sweet and Maxwell publishers. P 78-79 .Furmston, Chuah, (2010) Commercial and Consumer Law. London. Longman publishers. p 152-155 Read More