Legal

The Legal Ramifications of Ethical Issues in Business

The law governs many aspects of business life.

Ethics and law share a close relationship, in business and in other fields. However, business ethics and business law are not the same thing. The main difference between law and ethics is as follows: Ethics is what you should do, while law is what you are obligated to do. Ethical issues in business can sometimes have legal ramifications, including criminal penalties, civil disputes and contract disputes.

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1. Criminal

* Unethical conduct in business can sometimes lead to criminal penalties. While much of business law is governed by the civil system, there are certain ethical transgressions in business that cannot be dealt with through the civil system alone. When a business damages the environment, engages in false advertising or hires employees without proper documentation, that business could potentially face criminal charges. The reason these ethical breaches can lead to criminal charges is because they are cases where the company breached a contract, not just with an individual, but with society at large. While an ethical breach affecting just one individual can be dealt with through a lawsuit, a blatantly antisocial act requires a criminal remedy.

Civil

* Civil law is the branch of law that concerns contractual relationships between people in society. In addition to written contracts, civil law concerns itself with torts, or breaches of duties owed to others without an explicit agreement. Businesses generally have more written and unwritten duties than private...