Business Law and Ethics Review

Vocabulary flashcards covering business ethics, statutory and constitutional provisions, legal system priorities, international trade blocs, and key contractual clauses.

Utilitarianism

An ethical theory that maximizes overall good by choosing actions where the collective benefits outweigh the costs.

Deontology (Duty-Based Ethics)

An ethical theory directing businesses to follow absolute moral duties and rules, regardless of the financial outcome.

Virtue Ethics

An ethical theory emphasizing integrity, honesty, and good character over strict rule-following.

Justice Theory

An ethical theory focusing on fairness and ensuring an equitable distribution of benefits and burdens among stakeholders.

SOX Section 406 Requirements

A provision of the Sarbanes-Oxley Act requiring public companies to disclose whether they have adopted a written code of ethics for senior financial officers (the CFO, CEO, and controller), or publicly explain why not, with immediate disclosure of any changes or waivers via an SEC filing.

Federal False Claims Act

A statute protecting the government from being overcharged or defrauded by private contractors and businesses.

Qui Tam Lawsuits

Lawsuits permitted under the False Claims Act that allow private citizens (whistleblowers, often employees) to sue a company on behalf of the government and receive a percentage of the recovered money if successful.

Civil Actions

Lawsuits brought by private parties (individuals or businesses) to resolve disputes, enforce contracts, or seek financial compensation for harm, requiring a burden of proof of a preponderance of the evidence.

Criminal Actions

Cases brought by the government (prosecutors) against individuals or entities accused of committing a crime against society, requiring a burden of proof beyond a reasonable doubt with potential penalties including jail time.

Stare Decisis

A legal doctrine that binds courts to follow legal precedents established in previous, similar cases within the same jurisdiction.

Constitutional Law

The foundational law establishing government structure and protecting fundamental individual rights.

Statutory Law

Written laws passed by legislative bodies like Congress or state legislatures.

Administrative Law

Detailed regulations and rules created by executive branch agencies, such as the EPA or SEC.

Common Law

Legal principles and rules developed by judges through court decisions over centuries.

Federal Preemption

The strict hierarchy in the U.S. federal legal system where higher-level laws overrule lower-level laws.

The Commerce Clause

A constitutional provision that gives Congress the power to regulate business activity that crosses state lines or impacts interstate commerce.

The Taxing and Spending Clause

A constitutional provision giving Congress broad power to levy taxes and spend money, heavily influencing corporate financial structures.

The Supremacy Clause

A constitutional provision establishing that federal law wins if it directly conflicts with a state law.

The Due Process Clause

A constitutional provision guaranteeing businesses notice and a fair legal process before the government can take their property or restrict operations.

USMCA

United States-Mexico-Canada Agreement; a regional trade bloc consisting of the United States, Mexico, and Canada.

MERCOSUR

A regional trade bloc consisting of Brazil, Argentina, Paraguay, and Uruguay.

ASEAN

A regional trade bloc consisting of Singapore, Vietnam, Thailand, Indonesia, Philippines, and other member countries.

WTO Appellate Body

The appellate entity within the World Trade Organization dispute settlement mechanism that hears appeals on points of law, which has been paralyzed due to blocked member appointments.

MPIA (Multi-Party Interim Appeal Arbitration Arrangement)

A temporary alternative arbitration system used by some WTO member nations while the WTO Appellate Body is paralyzed.

Choice of Law Clause

A key international contractual provision that explicitly names which country's or state's laws will be used to interpret the contract.

Forum Selection Clause

A key international contractual provision designating the specific geographic court or arbitration location where any legal disputes must be filed.

Force Majeure Clause

A key international contractual provision that excuses a business from fulfilling its contractual obligations if an extraordinary, uncontrollable event occurs (e.g., war, natural disaster, pandemic).