When is a deal a “done” deal?
If a need is presented by a first party, and that need is filled by a second party, and the first party pays the second party with an agreed amount of money, is the exchange now finished? Is everybody now even, or does one party still owe the other?
No, that is not a question on a Business Law 101 exam. If it were, the answer would be that it depends on whether or not the parties have acted in good faith, and upon the existence of any warranties, express or implied. Okay, let’s assume that each party acted in good faith, and there was no warranty issue with the product or service. Was it a fair exchange, or is one party still owing? Let’s test your answer.
The year is 1972. The Arabs have just realized that they can control the world with oil prices. A gallon of gasoline, which has cost under 30 cents for 50 years or more, is inching up to 50 cents ,and there is wild talk of it going to a dollar. Supply begins to falter. Gas stations cannot get enough to meet demand, and long lines form around the block waiting to get fuel. A local station operator decides to limit each customer to 10 gallons, hoping to please as many customers as possible before his tanks are emptied again. He is threatened with fist fights by people who want more for themselves. He is scolded for not appreciating the fact that they have “given” him their oil change business in the past. “Given.” He got pretty steamed by that phrase. He had busted his butt taking care of their cars, and this was their response, that he owed them more?
Flash ahead to 2013. A car is towed in to a garage. The diagnosis is a failed fuel pump. The owner is furious. “You guys just had it in here last week and charged me $500. You should fix this without charging me any more money.” In fact ,the $500 job was for other work, completely unrelated to the fuel pump. “You should have known the fuel pump was going bad.” In fact, the car needed $1,000 worth of work last week, and the owner refused to have it done, saying he wanted it back for $500, and didn’t want the shop to keep finding problems with the car. He insisted that the shop owed him more, because he had “given” them $500.
A lady has an oil change, and then proceeds to a gas station for fuel. While there, she notices a nail in her tire, and it is going flat. After a frustrating wait for her auto club service truck to come and change her tire, she goes back to the oil change place and announces that they owe her a tire. The tire has a roofing nail in it. The oil change place has a concrete roof. No roofing nails on the site. They are not equipped to do tire repairs, and explain that she’ll have to take it to a tire shop for repairs. She is convinced that they caused it, because they had just worked on it, and that’s all the proof she needed. And, anyway, she had given them her business, so they owed her.
The point in these scenarios is that there was no dispute with warranty or good faith. The implication is that these consumers feel they paid too much, and had more goods or services owed to them. I can assure you though, that the providers of those goods and services feel that they did not charge enough, and the providers can hardly accost the consumers with demands that they pay more after the fact. That luxury resides solely with the consumer. For the shops, it’s the nature of the business, and they learn to live with it. Sometimes that “service with a smile,” is really an effort to “grin and bear it.”