Dow's Contract Agreement With Consumers example essay topic

Case Study: Dow Corning With an ever-increasing demand for products and services with Americas booming economy, consumers are exposed every day to new, innovative, and sometimes dangerous products. With these improvements in technology and sophistication, there are many products that are not, and cannot be understood by the consumer. There is very much interest now in the ethics of consumer production and marketing, in order to protect the consumer from these sometimes dangerous or misleading products. One of the major consumer product problems from the late seventy's through the ninety's was with silicon gel breast implants. Beginning in 1963, Dow Corning, a branch of the Dow Chemical Company, produced silicon breast implants. (Velasquez, 356) Spanning through major litigation into the late 1990's, there have been many questions into the quality, safety and ethical practices concerning the production and presentation of these products.

The Dow Corning case as found in Manuel Velasquez's Business Ethics, Concepts and Cases (355-359), provides an excellent example that gets to the base of problems dealing with ethics of consumer production and marketing. After a brief summary of the Dow Case, I will discuss how the case applies to The Contract View of Business's Duties to Consumers as presented in Chapter Six of Velasquez's Business Ethics. Did Dow agree to a contract with each consumer which would provide a faulty free, and safe product, but breach this contract by producing and selling a product that did not meet these measures Was there misleading information provided, or information withheld These questions will be touched as they are directly involved with this case, and the Contract View. As early as 1963, Dow and several other companies had begun to produce and sell plastic bags filled with silicon gel with the purpose of being breast implants. At that point in 1963 the company believed that the silicon substance was safe for use in humans, after being tested in short term, two-year, animal (non human) studies.

Because the implants were classified as a medical device, they were not under the inspection and regulation of the Food and Drug Administration, and therefore not subject to more critical study. In 1976, however, Congress passed an amendment that placed medical devices under the reach of the FDA. This same year, competition moved Dow to change its product to a more diluted form of silicon and a thinner bag in order to match consumer demand. This change spurred conflict within the company concerning the safety of the product when an engineer who helped develop the product argued that the new product would be harmful to consumers.

As Dow began to push the product, an independent laboratory was hired to conduct testing of the new product on rabbits. The test was a 7-day test, and even under the short period of time allotted for observation, lab workers noted "mild to occasionally moderate acute inflammatory reaction". However, the lab associated these reactions to procedure effects, and not effects of the implants and silicon themselves. Later, in another study, a lab noted that evidence of leaking silicon gel had been found in several tests done on animals.

Again these findings were overlooked. This time, because the scientists believed that the substance was biologically safe. In 1976, one year after these tests, and after the implants had begun to be used on human patients; Dow began to receive complaints from doctors that there were severe reactions with patients after only a short time of having the implants. Also, the doctors noted that there were signs of the silicon leaking into the patient's bodies. After receiving these observations, the Chairman of development wrote a memo expressing deep concern in the safety of the implants, and questioning the testing and speculation that had been used as positive signs to that point.

More studies in the late 1970's showed that cancerous tumors were as a result of the implants in 80% of tests. After review, the FDA discounted these findings, stating that the tests did not provide sound evidence to similar reactions possible in humans. 10 years later, the FDA began requiring lifetime tests in animals of products. This was met with concern within Dow, because most of the companies' claims had been based on a single 2-year dog study. In 1984, a federal court jury found Dow guilty in a case of a woman suffering injuries caused by an implant. The judge in that case declared the studies passed as assuring for Dow, to show doubt in the safety of the implants.

After loosing this case, Dow decided to give doctors warning of possible risks, while publicly stating that the silicon gel was safe, and even using a purified version of the substance. As cases began to mount against the company, The Public Citizen's health Research Group ordered the FDA to release its safety studies of the silicon gel implants. Over 20 pages of complaints, complications, illnesses and other negative observations were collected. Further, a study published in 1994 showed that only 30% of implants among women stayed intact after 15 years. In 1995, a study reported that 71% of the breast implant patients surveyed had experienced breaks in the implants, or severe leakage of the silicone gel substance. All information in the previous summary paragraphs was gathered from the case study Dow Corning found on pages 355-359, Business Ethics, Concepts and Cases written by Manuel Velasquez.

When looking at these facts on the basis of The Contract View of Business's Duties to consumers, you can question Dow's contract agreement with consumers was violated by the company. According to the contract view, "the relationship between a business' firm and its customers is essentially a contractual relationship, and the firms moral duties to the consumer are those crated by this contractual relationship". (Velasquez, 326) This states that on the basis that the product of the implant was purchased, Dow and each consumer had a contract agreement and formed a relationship through this contract. Through the nature of having formed this agreement, the contract view states that the firm has the responsibility to provide a product, and the consumer has the right of receiving that product.

The basis of the contract view falls under several limitations. A traditional moralist perspective would state that these 3 limitations must be met under a contract. Both sides of the agreement (consumer and business) know that they are entering an agreement. There cannot be intentional misrepresented or withheld information or facts of the contract or the situation from either side of the agreement. And both groups involved in the contract must voluntarily involved. (Velasquez, 326) In the Dow case two of these were met.

However, through the case, it is clear that information was consistently misrepresented. Throughout testing, and even after implants, there was consistent data overlooked, and not stated that showed the dangers of the implant and silicon gel. Through this fact, Dow violated the Contact view under the moralist perspective. Along with this view, Dow did not comply with the terms of their sales contract. Because Dow clearly stated early on, that the silicon gel implants were safe, and free from any risks, they clearly violated the consumer, by providing a product that had been agreed upon being safe. This Duty to Comply to the contract is the most basic moral duty that a business owes to its consumers, according to the contract view.

(Velasquez, 327) This basic moral duty was not upheld by Dow. The Duty of Dow, is to provide its customers with the agreed upon product. Without this basic initial understanding, the contract would never had taken place, because the consumer would not have agreed to an exchange without the product they desired. On a deeper level than simply withholding the product that had been agreed upon, Dow did not follow through with the duty of disclosure, another important duty of a business under the contract view. By not disclosing the proper information on the product, the contract was violated because the consumer did not know what was actually being provided. By this measure, the consumer was forcefully entered into the agreement.

There was not free will on the part of the consumer to receive faulty or misrepresented implants, rather the consumer did have free will to enter an agreement to receive the product as promised. "Freedom depends on knowledge". (Velasquez, 330) The Freedom of the consumer was violated therefore, because the correct information was not presented, and the proper knowledge of the product was unavailable. While these points all agree with those who advocate the Contract theory, there are critics of the theory.

One objection to this theory states that the contract theory focuses on the fact that a consumer can easily agree to a contract with full knowledge of the product being faulty, or without the stated properties. This is true, however, in early cases, I believe this case proves that this criticism does not apply. Because there was no evidence or any information proving that the silicon was unsafe, the consumer had no ability to choose the product on those claims. In this paper, I have stated how Dow violated their consumers on the basis of the contractual theory. I feel that through Dow's violation of the Duty of disclosure, the Duty not to Misrepresent, and the Duty to Comply, as I stated in the paper, Ethical practices were not held. Dow Corning blatantly misrepresented and withheld information that was essential to the consumers decision and contract making process.

Velasquez, Robert. Business Ethics, Concepts and Cases. Prentice Hall, New Jersey. 1998.