Business Law, Ethics, and Compliance
Core Concepts
Business law covers contracts (offer, acceptance, consideration, legality, capacity), torts (negligence, liability), intellectual property (patents, trademarks, copyrights), and employment law. Ethics involves moral principles guiding business conduct: utilitarianism, deontology, virtue ethics. Compliance ensures adherence to laws and regulations (e.g., GDPR, SOX, anti-bribery).
Traps in Questions
- Confusing a contract’s validity with enforceability: a contract may be valid but unenforceable (e.g., statute of limitations).
- Misapplying ethical frameworks: utilitarianism focuses on consequences (greatest good), deontology on duties/rules, virtue ethics on character.
- Assuming compliance with law equals ethical behavior: legal but unethical actions exist (e.g., exploiting loopholes).
- Mixing up types of IP: patents protect inventions, trademarks protect brand identifiers, copyrights protect original works.
- Forgetting that consideration must be bargained-for; past consideration is not valid.
Worked Example / Rule of Thumb
A company discovers a cheaper supplier that uses child labor. Rule: Apply ethical reasoning. Utilitarian: consider overall harm/benefit; deontological: duty not to exploit children; virtue: would a virtuous person do this? Also, compliance with local law may not suffice if international standards prohibit it. The ethical decision is to avoid the supplier or demand remediation.
Compliance
Understand key regulations: SOX (financial reporting), GDPR (data privacy), FCPA (anti-bribery). A trap is to assume compliance is only legal’s job; it’s organization-wide.
Contracts
Key elements: offer, acceptance, consideration, capacity, legality. A trap is to confuse an invitation to treat (e.g., advertisement) with an offer.