The difference between business ethics and business law
(The examples below is from Sweden and treated under Swedish law)
The first example is about a cooperation agreement. In the agreement a bid was accepted both orally and written without any objections. Later on however, the bidder claims that the price is too low that there had been a misunderstanding regarding the VAT. The bidder argued that the price would be exclusive of VAT, but that it was mistakenly expressed inclusive of VAT in the tender.
The bidder would not fulfill the agreement, unless the other party accepts the adjustment. There is not much the other party really can do. To process claims for damage would hardly be worthwhile unless substantial expenditure has been due to this. In this case, the bidder thus breaks the entered agreement but will probably go away without any cost, but with an irritated adversary. This is legally incorrect and probably negative businesswise, but with a short-term positive economic impact on the bidder. Dissatisfied customers are thus hardly a recipe for success in the long run. Breaking contracts is normally considered both legally and morally wrong. What do you think?
The second example concerns a couple who cohabited. The man is formally written on the property while the woman is on the loan at the bank. Mortgages on the property is not available as collateral in this case, which will prove to be a big mistake.
Unexpectedly and suddenly dies the husband. Legally, his parents inherit the property because no direct heirs exist. This was also before the cohabitation law. The parents refuse to contribute to solving the loan at the bank, and unfortunately there is nothing the woman can do. She stands on a loan in the bank but without tenure rights. Parents have in this case acted entirely legally correct, but on the other hand morally questionable. What do you think?
Business ethics and business law is as said not always the same.
Fellow and Accredited Associate
of the Institute for Independent business