First Principles of Business Law

10.1. The relationship between law and ethics

We have said that law provides rules of organisation and behaviour that are enforced by the state.  Particular conduct will be considered either legal or illegal depending on whether or not it accords with the relevant rules of law. 

What are ethics?  Ethics provide a standard, independent of law, by which conduct can be judged.  Ethics are based on abstract notions of ‘right’ and ‘wrong’ and of ‘good conscience’.  These ideas give rise to notions of ethical and unethical behaviour. 

 Which statement most accurately describes the relationship between law and ethics?

(a) Law is ethical by its very nature. This means that conduct in accordance with the law is also ethical conduct.

(b) What is allowed by law does not always accord with ethical ideas of right and wrong. This means that what is ‘legal’ may not necessarily be ethical.