Wednesday, February 1, 2012

Daily Business Ethics Halacha #8

We are learning from Case Studies in Business Ethics by the late Rabbi Dr. Aaron Levine z"l professor of economics at Yeshiva University.

Question: is capitalizing on an informational advantage that one has over another person immoral?

Halachah's disclosure obligation is geared towards the expectations of a hypothetical reasonable person in that position.  What constitutes reasonable expectations will depend on the type of transaction that is being conducted.  In a face to face transaction the seller is not responsible to point out to the buyer the visibly obvious defects in a product.  The reasonable expectation is that the buyer will see the flaws without the seller having to specifically point them out to him. 

Hence, voiding or adjusting the terms of a concluded transaction on the basis of visibly obvious flaws is not entertained by a Jewish court.


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