Business Law and Ethics Flashcards

What is 'arbitration' as an alternative to litigation?

Answer: A private dispute resolution process where a neutral third party makes a binding decision

Arbitration is a private, legally binding dispute resolution method where an arbitrator hears both sides and issues a decision.

What is the purpose of a 'non-disclosure agreement' (NDA)?

Answer: To protect confidential information from being shared with unauthorized parties

An NDA is a legal contract that prevents parties from sharing confidential information disclosed during a business relationship.

Which ethical framework judges the morality of an action based solely on its outcomes?

Answer: Utilitarianism

Utilitarianism evaluates actions by their consequences, aiming to produce the greatest good for the greatest number.

What does 'limited liability' mean for a business owner?

Answer: The owner's personal assets are protected from business debts and lawsuits

Limited liability means owners risk only their investment in the business; personal assets cannot be seized to satisfy business obligations.

What is 'eminent domain' in U.S. law?

Answer: The government's right to take private property for public use with fair compensation

Eminent domain is the constitutional power of federal and state governments to take private property for public use, provided just compensation is paid.

Which of the following is an example of 'insider trading'?

Answer: Trading stocks based on material, non-public information

Insider trading involves buying or selling securities based on confidential information not yet available to the public, which is illegal.