Business ethics and law intersect in areas such as contracts, misrepresentation, and minimum wage laws. Ethical considerations can also be legally enforceable, but not always. Unethical actions can be both ethically wrong and legally actionable, such as misrepresenting a used car as new. Some employers may try to circumvent minimum wage laws by hiring illegal immigrants and paying them less, which is both illegal and unethical.
Business ethics and law are two related terms that can exist independently of each other when it comes to business but intersect in various vital aspects. The reason for this intersection can be attributed to the fact that many times ethical considerations are also legally enforceable. This is not always the case, because some ethical considerations in business are more like an unwritten code based on basic morality that is assumed to be universal.
One of the examples of a situation where business ethics and the law intersect is in the area of contract in business. Morality or ethics dictate that when two or more parties agree on something, they should honor the agreement unless there is some form of extenuating circumstance that makes the session unduly difficult, or even impossible, to fulfill the agreement. However, this is not always the case, as some parties to an agreement often find a way to extricate themselves from the execution of an agreement. Fortunately, this type of act is not only ethically wrong, it is also a breach of the law of contract, and the injured party can seek redress in a court of competent jurisdiction.
Business ethics and the law also intersect in the area of misrepresentation where someone falsely presents a material fact to another party with the intention of causing the person to part with something valuable. An example of this is when a car salesman presents a used car to a customer as if the car were new, causing the customer to pay new car price for the used one. Clearly, such an action is ethically reprehensible and legally actionable. This is just one of several instances where business ethics and the law have a point of confluence.
In some countries, there are strict laws setting the minimum wage that an employer is legally obligated to pay its employees. This, however, does not stop some employers from looking for ways to circumvent this law. In that case, an unethical employer could hire some people based on their circumstances and use that as a means to pay them less than they deserve for the service they provide. An example would be a farmer who hires some illegal immigrants to work on the farm and decides to use their illegal status as a means to pay them far less than minimum wage. In doing so, the employer would have acted both illegally and unethically by first hiring the workers and then paying them too.
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