An Ethics/Moral Puzzle for the New Year

Someone I know hired a landscaper to build a stone patio in his backyard.  The landscaper completed the job, and the person I know never heard a peep.  No bill.  Nothing.  After four months or so, it became increasingly apparent that the landscaper had dropped the ball (or perhaps the hedge clippers) and had somehow neglected to bill the homeowner for the patio, which probably would have cost in the neighborhood of $3,000. 

So here's the puzzle for you ethicists out there.  Does the homeowner have a duty to notify the landscaper about the bill?  If so, how long should the homeowner wait?  If you think the homeowner has no such obligation to notify, what's your reasoning? 

Although it's not a legal ethics problem, I found the issue to be ethically and morally interesting, especially since the homeowner in question has gotten a wide variety of answers to the question.  How would you legal ethicists out there have advised the homeowner to proceed, and why? 

Update: In addition to reading the insightful comments posted below, you can read my additional thoughts here.

Comments

[Marty Lederman]

I'm not a legal "ethicist," but boy, I sure hope this doesn't pass for what's considered an "interesting" "puzzle" in legal ethics circles. What's the possible argument for keeping the windfall?

[Patrick S. O'Donnell]

I second Marty. Here's my comment at Jeff Lipshaw's post on this at Concurring Opinions:

I too think this is an easy one [agreeing with Jeff's remark that this falls under an application of the Kantian 'categorial imperative']: The homeowner is at least morally obligated to notify the contractor that he/she did not receive a bill for the job that the homeowner (formally or informally) contracted for. But I'm rather curious what reasons a "legal ethicist," or anyone else for that matter, might proffer for not paying for the job.

Incidentally, I was involved in somewhat similar case with a plumber (someone I worked alongside with on occasion when I was in the trades) who did various small jobs at our place. We did not receive a bill for a little over a month and I called to let him know (motivated in part because I knew him?). He said the work was "gratis" (his word) owing to the fact that one of my brothers, a general contractor in town, had sub-contracted an awful lot of work to him and this was one way to show his appreciation.

And recently I bought a few books and an expensive calendar (reproductions of Tibetan Buddhist art) at a small religiously-oriented bookstore and realized when I got home and looked at the receipt that we were not billed for the calendar (I usually don't look at my receipts but this one was rather large and thus easy on my eyes). I called to let them know (fear of divine retribution or bad karma?) and said I would be sending a check to pay for the calendar. Later my wife said something like, "well, if that was some big department store, I don't think I would have called them, as they don't need the few extra dollars." Our subsequent discussion hinged on the question of whether or not that was a relevant difference.

[Andrew Perlman]

I suspect that you are both right as to what the answer should be as a matter of ethics (or morality). What I like about this puzzle is that I think there is a fairly big gap between what we think the right answer to be and how many (most?) people will actually behave in this particular circumstance. If I had to guess, most people would agree that notification is the right thing to do, but only a fraction (how big?) would actually follow through when their own money is on the line.

[Patrick S. O'Donnell]

Perhaps, but that's a fairly speculative question that is difficult to answer in any general way (so many variables of specific circumstance, time, and place, etc.) and often seems to turn upon one's assumptions about human nature (assumptions that often serve, for better and worse, as self-fulfilling prophecies). Of course the gap between what people ought to do and what they in fact do is sometimes a yawning abyss, but that in no way diminishes the character of the duty or obligation (although this may be relevant to how we judge someone's acts or assess their character: hence 'situationism'). There are ethical traditions (Aristotlelian, virtues oriented, 'therapies of desire,' Confucian, Buddhist, etc.) that expend a good deal of energy detailing the kind of ethical and pedagogical practices deemed fundamental to cultivating or crafting the kinds of character for whom the gap between the "is" and "ought" is small or ever-closing. Of course the assumption here is that it takes some work to create persons of reliable moral character or people routinely responsive to the "call" of ethics. If these ethical traditions are part of familial socialization or integral somehow to public (civic) enculturation there's some hope for us yet.

[Patrick S. O'Donnell]

I want to add that I don't think this scenario is aptly characterized as in any way a "puzzle."

[Jeff Lipshaw]

Marty, I was astounded a number of times at the how the answers I got from some students in business associations changed when I changed a particularly thorny hypothetical to have them answer as "Chief Ethics Officer" rather than "Chief Legal Officer."

The issue here is not whether the homeowner OWES in the sense of unjust enrichment, but whether the homeowner has an affirmative legal or moral duty to notify the vendor of the fact of the unjust enrichment. I'm pretty sure somebody could cook up a[n academic]legal argument like this one: The default legal rule in this circumstance should be that it is the vendor's obligation to send the bill, because it will encourage the most efficient result. The failure to bill and collect efficiently is a transaction cost. The vendor is the best transaction cost avoider. Moreover, setting this as the default rule will encourage vendors to send their bills promptly.

I meant what I just wrote to be something of a parody, but it's really not. In view of the fact that many of us regularly teach the justification for legal rules, particularly in the private law arena, in just this way, Andy's hypo, I think, aptly distinguishes the divide between law and morality.

Is not notifying the other side of your windfall "just" or "fair"? I'm pretty sure there are some people out there arguing that only efficiency and not fairness (or justice) should be the basis for default legal rules. I like the idea of conceding that point, but suggesting that human flourishing really depends on there being another set of extra-legal norms that would move the homeowner to pick up the phone.

[Patrick S. O'Donnell]

Yes, another instance of the deleterious effects of subsuming everything (e.g. default legal rules) within the "law and economics" (e.g., 'economic effiency') genre of looking at things.

[John Steele]

Yeah, I think the non-legal dilemma is easy. The interesting questions might be: (1) why is the ethical solution easy when in the real world the homeowner is getting such disparate advice; and (2) how do we account for the gap between this easy dilemma and the fact that most attorneys in the adversarial system would say it's an easy analysis that you should pocket the windfall when your opponent drops the ball?

The first question explores the gap between normative and descriptive ethics and the second question explores with what's been called "the adversarial excuse."

[Tom Truman]

I expect the responses to this question vary greatly with the amount of money involved. If the number were $3 or $30, far fewer people would be likely to return it.

[Patrick S. O'Donnell]

Re: the first question

"Descriptive ethics" involves history, anthropology, economics, sociology, psychology (including social psychology), and worldview description and analysis. I thinks these sciences are in their infancy (e.g., with the possible exception of anthropology, they are all rather Eurocentric, or, if you prefer, parochial and provincial), and are frequently not at all clear about what is to count as "normative ethics" (utilitarianism? 'common morality'? deontology? some combination thereof?, etc.) or the meaning of the relation between the descriptive and the normative (which in any case is not at all hard and fast, for much of what counts as 'description' invariably and unavoidably involves value[s] questions and thus may involve ethical presuppositions and assumptions; cf., for instance, the fact/value dichotomy discussed by Iris Murdoch, Amartya Sen, Martha Nussbaum, Hilary Putnam, among others; as Sen [and Daniel Hausman, Michael McPherson, Partha Dasgupta...] has demonstrated, economics as a profession has been dispositionally prone to obtuseness and opacity when it comes to 'the positive' and 'the normative'). There seems to be an elective affinity between those attracted to the social sciences and a corrosive sort of skepticism regarding the ideals, principles, and values found in prominent religious and ethical traditions (as if descriptions of human behavior decisively count, in an evidentiary way, against 'normative ethics').

[Patrick S. O'Donnell]

Erratum: "I think these sciences...."

[W.R. Chambers]

I would remind him about the bill because (a) it would be the right thing to do,(b) relationships are important and (c) you can't have a relationship where there is distrust.

[Dennis Tuchler]

Assume the contractor has not sent a bill until a week before the period of limitations has only a week to expire. The debtor asks whether he must pay? He asks: "Hasn't the period of limitations already gone by?" Do you ask whether he is sure he still owes the money? Whether the demand is in the right amount? Do you tell him the period of limitations has about run?

dennis

[Patrick S. O'Donnell]

In response to W.R. Chambers:

Relationships are important, but the relation here is presumably not personal, and thus on the order of a contractual relation, which seems to assume some level of distrust of sorts, or at least not the high level (or kind) of trust found in close relationships; those whom we've come (or learned) to trust, to have a relationship with are, typically, not parties to our contracts: "It is the genius of the market to organize exchange in ways that commonly do not require high levels of trust" (Russell Hardin). So you *can* have an economic relation in which there is fair amount of distrust--or fear or suspicion--allayed in some measure, for example, by a contract; parties engaged in economic relationships over a long period of time may rely, it seems, less and less on the (legal) formalities of contract (they've learned to trust each other); and thus we might say the contract itself becomes just a (ritualistic) formality.

Things may be a bit different in a small town in which all or most of the contractors know each other: Let's say the contractors eventually learn of the homeowner's decision to unjustly enrich herself, this could have reputational consequences that affect any future dealings with any one of these contractors, whereby the homeowner learns the value of ethical behavior the hard way.

[Jeff Lipshaw]

To Dennis's question - it seems to me the only appropriate response to one's CLIENT as a matter of legal advice is to give an informed and correct statement of the legal consequence of the statute of limitations in these circumstances. Hence, you would forthrightly advise the client that the creditor's failure to bring a lawsuit in the next week, absent some tolling along the way, would eliminate any legal duty to pay.

That, of course, has nothing to do with the import of Andy's question, which poses the purely ethical question for the client not the lawyer. The legal obligation often does not match the ethical obligation. And some clients you represent while holding your nose.

[Patrick S. O'Donnell]

Jeff,

Is it inappropriate to supplement legal advice to a client with ethical counsel on what is morally proper? on what a person of integrity and self-respect would do? (making clear the distinction between what is legal advice and what is ethically proper)

[Patrick S. O'Donnell]

I might have said that a legal capacity or professional ability to discriminate legal obligation(s) from ethical obligation(s) reflects a knowledge of what constitutes both, and thus advice on the latter could not be said to be beyond one's competence or overstepping one's professional boundaries, indeed, perhaps it's a civic obligation! (the recent SEP entry on 'civic education' explores how this might come to be the case, e.g., in those theories where being a good person is part and parcel of what it means to be a good citizen)

[Jeff Lipshaw]

Yes, as to the ethical counsel. I should have made that clear. I did it all the time. That's "yes, it's legal, but it's stupid" or the "yes, it's legal but it's wrong" advice.

I would go further and say that truly effective business lawyers have to give the additional advice.

[A.J. Sutter]

Notwithstanding that Jeff Lipshaw claims to have written a parody, my heart sinks when I read that law students are being fed economics-based justifications for legal rules.

First of all, shouldn't the first priority be to teach law students what the law IS (including its ambiguities), rather than what the prof considers it should be?

Second, while justifications for what should be deemed a default rule might come in handy when writing a brief, the future lawyer could be on either side of the issue, so hearing one justification based on transaction costs won't help him or her to represent the contractor's side of the story. (RIP quantum meruit, BTW?)

Thirdly, is there any awareness within L&E of economists' extensive critique of the foundations of neoclassical economics, quite apart from K&T's behavioral economics? Is there any awareness of the history of NCE, and the deep difficulties with supply-and-demand, equilibrium, quantitaive formalism, deductive approach, and other such notions? (See, e.g., historical work of W. Hands, P. Mirowski, E.-M. Sent etc., mathematical work and popular writings of B. Mandelbrot etc., etc.) If so, is this critique also taught to law students?

As for the point about letting the client know when he or she is being a jerk from an ethical or moral point of view, that (together with some tact in doing so) is absolutely part of a business lawyer's role. Better to teach your students that aspect of the role than about transaction costs.

[Anita Bernstein]

As long as we're veering from legal ethics, I would remark on the enmity between homeowners and contractors. It might have played a role in the variations Andy got in his responses--that is, made an easy question seem complicated--and also is consistent with his suspicion about what homeowners would do in real life, even those who would, say, turn in an overflowing wallet to the police if they found it on the street. A year or so ago I spent an illuminating hour or two online trying to understand why I hated my contractor ... and why friends and acquaintances typically felt the same way about theirs, and why the feeling is mutual. For the record, I agree that the answer to the question is clear and, of course, that the pseudo-efficiency rationale for a contrary response is a crock.

[Patrick S. O'Donnell]

Anita,

I've sent you an e-mail addressing your perception of "enmity between homeowners and contractors."