Conferences on the Virtues
By Fr. Bruno Cocuzzi, ocd
Number 60
Contracts for a Specific
Work Product
The next type
of onerous contract we will consider is the Contract for a
Specific Work Product. The type of
work-product in question would be a building, a suit of clothes, a work of art,
or any other kind of artifact. It
includes things produced from raw materials provided by the builder or artisan
himself, or by the one who contracts for the Work-Product.
When the
work-product involves major construction, as in putting up a building or
building a road, the risks are borne by the person or agency that has
contracted to complete the work. The
General Contractor is the one who must “insure” the incomplete product against
accidental damages. Once the work is
completed and possession surrendered, the owner assumes the burden of insuring
the premises.
The virtue of
Commutative Justice imposes certain obligations upon the General Contractor or
the Artisan who has agreed to construct or make the desired object:
1. The
work must be produced in conformity to the agreed upon specifications, i.e.,
the quality of the materials, the size and shape, the durability, the
workmanship, the time allotted to complete it, etc.
What
this means, at least, is that he cannot try to “cut corners” or reduce his
construction costs by using cheaper materials or hiring less than competent
workmen.
2. If
he has been selected after public bids were solicited, he must be satisfied
with the
price
agreed upon.
What
this means is that if he has made an error in estimating the cost of the
construction, and his margin of profit is much less than he had bargained for,
he cannot in justice demand more than the contract specifies. The reason is that these are a type of
contracts of chance or speculative contracts, and gamblers have
no choice but to “accept” the outcome with good grace.
In
the event that the first of the above obligations has been violated by the
general contractor in whole or in part he would be held to make restitution for
any monetary losses accruing to the other party that are a direct result of the
violation.
The
author of my textbook mentions also that general contractors are often tempted
to bribe public inspectors to overlook defects in the construction and the use
of materials that do not meet agreed upon specification. Apparently not all of them manage to avoid
falling into the corrupt practice.
There
are, of course, corresponding obligations that the party who contracts for the
work must fulfill:
1) Pay
the general contractor the agreed upon price at the agreed upon time. This would include partial payments as the
work proceeds, final payment being made when the work has been completed
according to specifications.
2) In
the event he asks the general contractor or artisan to make changes in the plan
of the work during the course of construction or manufacture, he must meet the
costs of making the said changes.
3) When
the work is completed and has passed inspection, he is obliged to take
possession of the finished product.
Should he delay unreasonably in taking possession, the owner must make
restitution to the General Contractor or artisan for any expenses that arise
out of his having to keep or protect it.
Article 3
Next we
consider Contracts of Employment.
This is the
type of contract in which, in return for a certain just wage, a workman will
perform a certain type of work.
It differs from
the contract spoken of in Article 2, above, because the specific matter
bargained for is personal labor, not the manufactured objects that often
result.
There was some
doubt in the past as to the real nature of this contract.
Some economists
thought of it as a purchase-and-sale agreement.
Others thought
of it as a kind of partnership, in which those possessing the Capital
would team up with Workmen to produce things for the use of the general public,
things necessary for the common good.
Still others
thought of the Contract of Employment as just one among the many types of
general contracts spoken of in a previous conference, namely I will do such
and such for you, if you will give such and such to me, and vice versa.
But strictly
speaking, it is none of these.
It is not the
first because Labor is not a commodity that has a separate discrete
existence as does merchandise, which is the matter or object of purchase and
sale agreements.
Neither is it a
partnership, because Capital has NEVER been willing to see Labor as being on a
par with itself, with strict rights to share the profits equally.
Nor is the
Contract of Employment one of the basic general contracts, because in those
situations the parties thereto are always peers, something that is not
true of the Employee vis-à-vis his Employer.
But of all three, this comes closest to the truth, in virtue of the
special dignity of human Labor.
Therefore, the
true nature of this contract is one of Let-and-Lease. The workman has complete dominion over the use and exercise of
his operative faculties, that is, his Labor.
He can, therefore, exchange them (it) for a price, much as a Lessor
would grant the use of a piece of equipment to a Lessee for a certain sum. The phrase “much as” is emphasized because
this kind of contract cannot be compared to the Letting and Leasing of
buildings, land or equipment. Personal
Labor enjoys a special human quality that distinguishes it and exalts it
far above mere property and merchandise.
One reason for
the dignity of human labor is derived from the person who performs
it. To every person’s labor there
adheres the special worth and dignity he enjoys as being made in the image and
likeness of God as a rational, free agent.
Another reason
is the goal of human labor, not so much the work product or the useful energy
expended, but the purpose for which God enjoined labor upon his human
creatures: to support human life.
Before going
on, let me state at this point that not all Employment Contracts are written
out and signed by both parties. Most of
the time employment contracts are verbal contracts, the contents and covenants
of which are governed by custom, usage, and civil law.
What, then, are
the duties and obligations of workers?
To what implied covenants are they bound?
Workers have
the duty and the obligation
1. Faithfully
and entirely to do the work and perform the services they have freely agreed
upon to provide. And they are to do so
at the time specified and with due diligence, according and subject to the
instructions and guidelines laid down by the employer.
2. They
are to use reasonable care not to do harm to, nor permit harm to befall any of
the things that belong to the employer:
the workplace, the materials, the tools, machines, and other instruments
necessary to do their work.
The
next three obligations apparently come into play when some kind of dispute or
dissatisfaction arises between the employer and at least some of the employees:
3. The
employee is to do no harm to the person of the employer, whether that is
physical harm, threats, slander or verbal abuse.
4. In
protecting their rights as employees, they must abstain from using force,
conspiracy or alliances with criminal elements. Positively, they are to use recognized legitimate means such as forming
associations or unions to represent them in making their concerns known to the
employer, and to rely upon good faith bargaining and arbitration to resolve
differences, pursuant to Civil law governing employer-employee relationships.
5. To
have recourse to strike only for grave and just reasons, and only after
all other lawful means have failed to resolve the impasse.
Of course,
employers are in turn bound by certain duties and obligations toward the
employees, as required by Commutative Justice:
1. To
have reverence and respect for the dignity of the human person in each
of the people comprising the workforce, which dignity is founded upon their
status as human, religious beings in every case, and in the case of Christians,
upon their additional status as Children of God by adoption. They are not to think of the employees as
mere servants who are mere tools, which have no value apart from their
usefulness.
2. To
bear in mind the good of the souls and spirits of the workmen, allowing them
the time and the opportunity to attend to their basic religious, psychological
and family-oriented needs. Except where
the nature of the employment absolutely requires it, the employees’ weekly days
off should include the Lord’s Day.
Special consideration should also be extended to working mothers to
allow them to devote necessary time to the needs and lawful demands of the home
and the children.
3. To
be mindful of the physical strength and capacity of the individual employees
based upon differences of age and sex, including tolerance for stressful
work. Allied with this is the duty to
maintain a safe and healthful working environment.
4. The
employer is also required to pay a just wage and to do so promptly at the
established time.
With
regard to a just wage, it is unfortunate that the measure is not the
individual family needs of each of the workmen, which would, of course, depend
upon the size of his family. In other
words, what a shame that we do not consider that only a living wage is a
just wage. Rather, greed and
pride seem to determine the norm.
Question Three –
Contracts of Association
These
are agreements by means of which two or more agents devote and combine their
individual efforts and resources to attain a common goal or purpose. According to my author, the term is
restricted nowadays to only those associations where the common goal is
monetary gain, which would be shared pro rata. Thus, in my opinion, we in the United States would refer to these
associations as partnerships.
1. It
is a consensual agreement, which expressly confers the rights on each of
the parties to divide the profits in proportion to the efforts or resources
invested in the enterprise. Without
this aspect, one of the parties would be the entrepreneur entitled to the
profits, and the others who contribute to the common effort would have a right
only to a salary or wages.
2. By
which the parties to the contract contribute something of value,
which could be identical in kind or different, of equal or of unequal worth,
such as Money, real Property, Machinery, Tools, personal expertise (including
labor) or even Commercial Credit.
3. For
the purpose of making money. This
requires no comment.
The duties and
obligations of members of an Association arise out of (1) the Contract which
establishes it, (2) customary business and commercial practices, and (3) the
Civil Law. It goes without saying that
the common enterprise must be a lawful one, because otherwise, members or
partners would not be bound in conscience. It is never an injustice to “violate an agreement” (break a
promise) to do evil. Indeed, one would
be obliged in conscience to do so. Once
the valid and licit Contract of Association has been made, the constituent
members owe certain things to the Association considered as an entity in
itself, and to the other members individually.
With regard to
the Association, each member must:
1. Contribute
to the common enterprise in good faith and entirely the things he has promised,
whether it is money, some physical thing, his expertise or his labor.
2. Carefully
avoid acting in the name of or obliging the Association in his own name, that
is, without the express authority of the Association, granted either through
express covenants in the Contract or by the members acting together. Should he attempt to do so, he binds
himself, not the Association.
3. The
individual members, as joint administrators of the enterprise, must conduct its
affairs as if each were the very owner of the assets and resources of
the Association, and to do so with reasonable diligence.
Thus,
if losses were incurred as a result of culpable negligence on the part of a
member, he would be held in justice to make restitution.
Next in order
(Fourth Question), my textbook treats of a kind of Contract, which I have
difficulty understanding because it doesn’t seem to correspond to any Contracts
we, here in the States, are familiar with.
In Latin it is called Census. It is defined as:
A Contract whereby there is
bought and sold the right to receive an income, or, in other words, a
bi-lateral agreement by which an individual (the creditor or consualist)
purchases from another (the debtor or censuarius) for a one-time price the
right to receive periodic payments out of the earnings of some
income-generating thing or person.
Since the
closest thing to this I can think of is an Annuity Contract, and I know
very little about such a contract, I will go on to the other kind of Contract
treated under the Fourth Question.
Contracts of Currency Exchange
This is a
contract by means of which it is agreed that one party to the contract (the
agent of exchange), promises, for a profit, to give back in a different
currency the value of the currency he has accepted from the other party to the
contract.
Although it is
stated hat the value of the currency exchanged is the same, in practice the
profit is taken directly from the different currency given back, so that the
agent of exchange really gives back less value than he has received.
Those of you
who have traveled abroad certainly know more about exchanging currency than I
do, so I will say nothing more about this kind of contract.
Nevertheless,
with regard to the Contract called Census, I do believe that it would
have to be a Written Contract, so that evidence thereof would be available in
the event the debtor or consuarius would default, and the Creditor or
consualist would have to seek the aid of a Court of Law to vindicate his right
to the periodic income.
With regard to
the Contract of Exchange, it would be a verbal contract, or a contract without
words being spoken, analogous to the purchase and sale agreement made when one
goes to the supermarket or department store and purchases merchandise. In both cases, the party seeking to exchange
the currency or purchase an item would merely present the currency or the
merchandise plus the money to the agent of exchange or cashier and walk away
with the currency of the other country as the item bought.
As to the
duties and obligations of the parties to these two kinds of Contracts, it seems
to me that all are summed up and included in the very general obligation
incumbent upon the parties to all contracts, namely, to act honestly and in
good faith.
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With last
month’s conference we completed five whole years of this series on the Cardinal
Virtues. This current one is,
therefore, the 60th. It’s
hard to believe.
As I look over
the table of contents of my Textbook, I see that we still have a long way to
go. We have to deal with Gratuitous
Bilateral Contracts, Contracts of Chance and finally Subsidiary or Accessory
Contract.
Then we go to a
short section on Distributive Justice, which is followed by a long
Section on the Virtues Allied to Justice. May God help us all to persevere!
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