Ethics and the Law
Unethical Behavior in our World 2.1
Ethical behavior is a widespread concern in business; Enron and Arthur Anderson
Sarbanes-Oxleya federal statute that placed an onus on upper management to
monitor closely the financial
Legal Purpose of Contracts
Legality and the Public Interest 12.1
*Legality of purpose is one of the essential elements of an enforceable contract*
Although the parties to a contract are legally competent and have reached
mutual agreement, the
The Employer-Employee Relationship
Duties of Employer and Employee to Each Other 31.1
One of the most important legal relationships is that of employer-employee.
The employer owes several legal duties to his or her employee:
o He must pay an em
Worker Safety and Health 32.1
Numerous federal and state laws protect employees from accidents and
sicknesses that are job-related.
o State levelthere are workers compensation statutes, which pertain to
how a worker may recover d
Principal-Agent Relationships 19.1
Principal-agent relationshipit is often necessary or desirable for a person or
firm to be represented by another in business or personal dealings with third
o Agenta person authorized to act on
Protecting Consumers and Third Parties 18.1
A seller or manufacturer has a significant legal responsibility to buyers and users
of goods and services, as well as to third parties.
o These obligations are covered by the law of sales,
*Chapter 17 Slides*
The Law of Sales 17.1
Because the law of sales affects so many individuals and businesses, Article 2 of
the Uniform Commercial Code (UCC) is quite comprehensive.
o Does not include investment securities, real estate, o
Discharge of Contracts
Termination of Contracts 15.1
Contracts may be terminated by:
3. Impossibility of performance
5. Operation of law
7. Laws and regulations protecting the consumer
Operation of Contracts
*Chapter 14 Slides*
Contracts Involving Third Parties 14.1
Normally only the two parties to a contract have rights and duties under it.
o However, there are two important exceptions to this rule:
1. When the purpose of a
Form of Contracts
The Requirement of Proper Form 13.1
The essential elements of a valid contract are:
1. Offer and acceptance
2. Mutual agreement
4. Competent parties
5. Legality of purpose
6. Proper form
When Contracts Should
The Nature of Consideration 10.1
Considerationthe promises exchanged by the parties to a contract; to give up
something of value they have a legal right to keep, such as money or property; to
do something they are not otherwise le
The Capacity to a Contract 11.1
Parties to a contract must be competent in both age and mentality.
Competent partya person of legal age and at least normal mentality who is
considered by law to be capable of understanding the
Defective Agreements 9.1
Genuineness, or reality, of agreement is said to be present in a contract when
there is a true meeting of the minds of the parties.
o If there is any misunderstanding or if force or deception was used to
The Nature of a Contract 7.1
Contracta legally enforceable agreement that is created when two or more
competent parties agree to perform, or to avoid performing, certain acts that
they have a legal right to do and that meet certain leg
Offer and Acceptance
Reaching Agreement 8.1
For a contract to be valid, there must be a proposal that is both offered by the
offeror and accepted by the offeree.
Requirements for a Valid Offer 8.2
For an offer to be valid, it must be:
The United States Constitution 5.1
This document, although relatively brief, forms the basis for all American law.
Each of the following must be consistent with the U.S. Constitution:
o All federal statutes enacted by Congress
The law assures each person certain rights and assigns each person certain duties.
Federal, state, and local governments enforce specific laws called statutes that
are designed to protect the public at large.
Administrative Agencies 6.1
Administrative agencya governmental body responsible for the control and
supervision of a particular activity or area of public interest.
o The affect nearly every individual, business firm, and org
The Nature of Torts 4.1
Torta violation of the rights of an identifiable individual or business that has been
wronged either intentionally or by negligence.
The law of tort does not deal with duties imposed by contract but is