Business Law with UCC Applications 16e By Paul
Sukys (Instructor's Manual All Chapters, 100%
Original Verified, A+ Grade)
Instructor’s Manual
Chapter 1, Ethics and the Law
Key Terms
Appretiare (p. 32)
Cost–benefit thinking (p. 26)
Descriptive theory (p. 14)
Dyad (p. 22)
Ethic of responsibility (p. 22)
Ethic of ultimate ends (p. 22)
Ethics (p. 6)
Failed states (p. 24)
Hyper-intolerance (p. 10)
Law (p. 4)
Morals (p. 5)
Nonjudgmentalism (p. 9)
Natural law theory (p. 6)
Penumbra rights (p. 19)
Prescriptive theory (p. 14)
Rational ethics (p. 18)
Rogue States (p. 24)
Responsibility to Protect (R2P) (p. 25)
Social contract ethics (p. 14)
Unstable states (p. 24)
Utilitarianism (p. 15)
Learning Objectives
After reading this chapter, students should be able to accomplish the following objectives:
1. Define law, morality, and ethics.
2. Distinguish between traditional natural law and modern natural law.
3. Distinguish between nonjudgmentalism and hyper-intolerance.
4. Describe social contract ethics.
5. Outline the steps in applying utilitarianism.
6. Define rational ethics.
7. Explain the dyadic nature of ethics in government.
8. Explore the need for ethical responsibility in business.
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9. Describe the need for law in our society.
10. Clarify how the law and ethics can often benefit from anarchy.
Major Concepts
1-1 Defining the Law, Morality, and Ethics
The law consists of rules of conduct established by the government of a society to maintain
harmony, stability, and justice. Morals involve the values that govern a society’s attitude
toward right and wrong. Ethics, in contrast, attempts to develop a means for determining
how to formulate and apply rules in line with those values.
1-2 Ethical Theories
The social contract option holds that right and wrong are measured by the obligations
imposed on each individual by an implied agreement among all the people within a
particular social system. The utilitarian option is an ethical theory that says that the
morality of an action is determined by its ultimate effects. The more good that results, the
more ethical is the action. Conversely, the more bad that results, the less ethical is the
action. The rational option is a philosophical theory that says ethical values can be
determined by a proper application of human reason. The theory assumes, and rightfully
so, that because all human beings are rational, all human beings ought to have the same
ethical values.
1-3 Ethics and the Government
The government of a nation-state has two objectives that simultaneously justify its power
and enable the proper exercise of that power: (1) to protect its own existence and (2) to
protect the lives, health, safety, and well-being of its own citizens. To meet those two
objectives, national leaders must recognize the conflict that emerges from within a dyad or
two-level system of morality: (1) the exercise of individual morality, represented by the
ethic of ultimate ends, and (2) the exercise of national morality, represented by the ethic of
responsibility.
1-4 Ethics and Business
Corporations owe society a level of responsibility because the government has granted
certain legal advantages to corporations. Another reason for expecting ethically responsible
decisions from corporate executives is that corporations have a great deal of power in the
economic structure, and with power comes responsibility. Finally, corporations should act
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ethically because it is in their own best interest to do so.
1-5 The Relationship between Law and Ethics
In a perfect society, ethics and the law would always coincide. Our society is not perfect
and is not likely to become so in the foreseeable future. Therefore, our society needs the
law and the legal system to give it structure, harmony, predictability, and justice.
Chapter Outline
I. Defining the Law, Morality, and Ethics
A. The Law and Morality
• The law consists of rules of conduct established by the government of a society to
maintain harmony, stability, and justice.
• Morals are values that govern the difference between right and wrong and good and
evil.
B. Values and Ethics
• Values come from ethics.
• Ethics is the attempt to develop a means of determining what these values really are and
for formulating and applying rules that enforce those values.
• Morality and the law are united in a common bond based on their intrinsic nature.
• Traditional natural law sees law as originating from some objective, superior force
that stands outside the everyday experience of most people.
• A law with an immoral purpose is not a law at all.
• Modern natural law also sees law as originating from an objective origin point;
however, that origin point is conceived of by the human mind.
o An inherent weakness is that the observation and conclusions drawn can be biased
by the observer.
• Nonjudgmentalism is the tendency to be tolerant of every type of behavior, even the
most reprehensible acts.
• Hyper-intolerance is as damaging as nonjudgmentalism. It can be defined as open
hostility to the views, ideas, traditions, principles, and beliefs held and practiced by
others.
C. Ethical Decision Making
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• Ethical decisions are made in a variety of ways:
o Some people act on instinct.
o Some people try to do what they “believe” is right.
o Some people act within set guidelines.
• Some professions, businesses, and organizations develop guidelines usually called rules
of conduct or canons of professional responsibility.
o Although such rules are admirable, they are often so long and complex that they
end up covering pages of text that require an in-depth study just to understand the
basics.
II. Ethical Theories
A. The Social Contract Option
• Social contract ethics holds that right and wrong are measured by the obligations
imposed on each individual by an implied agreement among all the people within a
particular social system.
• English philosopher Thomas Hobbes is generally credited with formulating the modern
version of the theory in his book Leviathan.
o At the most fundamental level, Hobbes says that human beings have two core
rights that cannot be sacrificed, traded, or relinquished in any way:
▪ The right to live
▪ The right to live in peace and security
• The existence of the social contract permits people to live together in peace and
harmony, but it does not permit anyone, not even the leader, to violate the core rights of
life and security.
• Social contract ethics is descriptive rather than prescriptive.
o A descriptive theory simply describes the values at work within a social system,
rather than explaining how the values originated in the first place.
o A prescriptive theory explains how to come up with the values that permit a
society to run smoothly.
B. The Utilitarian Option
• Utilitarianism is an ethical theory that says that the ethical quality of an action is
determined by its ultimate effects.
• The more good that results, the more ethical is the action.
o Conversely, the more bad that results, the less ethical is the action.
• The main problem with utilitarianism is developing a commonly understood definition
of good.
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