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Business Law and Ethics Essay

In the field of business just like in any other field there are laws and regulations which govern the manner in which various activities are to be carried out. This ensures that compliance enhanced and that no party in the business field is exploited unduly. Business ethics ensure that people in the business field are professional in all of their dealings. The following discussion focuses on some case scenarios and examines how business law and ethics is applied.

Chapter 1 Q.9

The case in this question by and large deals with negligence. Negligence is a legal concept which refers to an unethical and unprofessional act which in most cases results to injury of an innocent party. From the facts of the case Buick Motor Company manufactured an automobile that had a defective wood.

However the defective wood was from another manufacturer. However Buick Motor Company did not take any step to carry out inspection to establish the fitness of the wheel that they had purchased from the other company. Failure to carry out the inspection amounted to negligence on the part of the Buick Motor Company. But the most confusing issue is, now that very many parties were involved in this transaction, which

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is to be held liable?

It is rather obvious that the party liable or responsible is the initial manufacturing company that sold a defective wheel to Buick. However the fact that Buick did not carry out inspection to establish of the wheel was defective then the blame is passed on to them and therefore they will be held responsible in this case. In any case they do not have any proof that they bought a defective wheel since they did not carry out an inspection. Now Buick sold the automobile to a retailer who then sold the vehicle to Mr. MacPherson who suffered injury as a result of the defective wheel.

The legal principle that makes Buick Company liable even though they did not deal direct with Mr. MacPherson is principal’s liability (Halbert, 2005).According to this principle the owner of an automobile is held responsible for the acts of his agents. Therefore although the defective automobile was sold to Mr. MacPherson by a retailer the retailer is viewed as the agent of Buick and thus makes the manufacturing company responsible.


In 1997 Drudge Report which a free website page that reports gossips and is hosted by American Online published some defamatory information regarding the Sidney Blumenthal Family. The reports claimed that Sidney Blumenthal who was newly appointed as an aide in the administration of Bill Clinton was previously involved in spousal abuse. The Menthal family sued both AOL and Drudge for defamation under the Defamation Act which states that any person who publishes defamation is responsible for it.

However American Online argued that they could not possibly be held liable as they were protected by the Communications Decency Act. The presiding judge argues that Drudge who was not a journalist, a reporter or even news gatherer could not be charged as he was as he had already admitted a gossip purveyor (Halbert, 2005). American Online on the other hand was protected by the Communications Decency Act which states that as provider of an interactive computer service cannot be held liable for publishing information provided by another source of content. AOL was therefore exonerated form the blame (William, 2006).

Chapter 2. Q6

Sexual harassment is defined as any unwelcome sexual advances that creates an uncomfortable environment and makes the victim especially in a work step up unproductive as a result o harassment. In sexual harassment there is need to prove that the harassment actually occurred. The sexual advances need to be unwelcome. Tyson argues that what Gary was complaining about was not unwelcome and did not in any way affect any term, condition or privilege employment.

However despite the fact that Tyson disputed these allegations the jury went ahead and awarded Gary a hefty amount in form of damages. The most effective step though it is not always guaranteed is for Tyson to make an appeal of this decision in a court with a higher jurisdiction than the trial court.

Chapter 4. Q4

Even though not expressly put, there is always a presumption that every profit making organization and indeed all organization that comply with the laws of the land are drug free zones. This means that every organization even though it does not have clearly put no drug policy by implication it actually does not support anybody who abuses drug and who has been involved in drug abuse previously (William, 2006).

Thus this is the argument that the company may use to justify the exemption of the grandson. However we cannot overlook the fact that if it were on basis of profit maximization the decision may be different. This is because the grandson in question has high qualifications making him one of the sought after employees. Thus the scenario may change depending on the interests of the company.


Ethics and law go hand in hand. If the law states that the standards of construction need to be raised any person who deviates from the provision of the law is in contravention of the same and will be held liable for that. In this case the Chinese Contractor, would he decide to build his buildings with standards that fall short those that are provided in the law will be going against the law. It may be true that the cost of construction will go high if the new law is implemented but the law must be obeyed at all time. It is therefore important that you observe ethical principles and not listen to the Chinese contractor.


  1. William (2006). Ethics, Law and Business, London: Routledge.

Halbert, T. (2005). Law & Ethics in the Business Environment. London: Cengage Learning.

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