Laws Concerning Unethical Business Practices & Breaches in Contracts

There’s a range of federal and states laws aiming to protect both customers and employees of different organizations and companies. Laws on unethical business practices strictly prohibit companies from deceiving consumers and manipulating the consumer market. Laws on breaches of contract strictly impose that both parties fulfill their obligations as signed or agreed. Failure to follow both state and federal laws can lead to certain repercussions.

Reputational Compliance

Reputational Compliance


  1. Clayton Act

    • Together with the Federal Trade Commission Act, the Clayton Act was passed to smooth the edges of the anti-trust laws and to identify behavior without protection of the law. Under the Clayton Act, any activity or actions that considerably reduce the level of competition or creates a monopoly in the market is considered unlawful or unethical business practice. That is, it is not only illegal to create a monopoly, but also to initiate action which nurture such atmosphere or market condition. Economists in general regard monopoly as an unhealthy environment for the public, except for several areas such as government control and law enforcement. A monopoly does not allow room for comparisons and customers may be getting low-quality products and services.

    Statute of Frauds

    • Just like how companies and different organizations are prohibited from deceiving and control consumers, several federal and state laws also strictly require different parties to live up to their responsibilities and “end of the bargain.” That is, for many business transactions/dealings, it’s best to always have a contract. Although it is not required, it is often safer to put everything down in writing. This helps make things more enforceable. Even though the Statute of Frauds may vary or have added or amended provisions in each state, it generally requires a written contract for the following things: a contract that lasts for over a year, a promise to pay, real property sales, property leases that extends over a year, transfer of properties and transactions that go beyond a lifetime.  The Statute of Frauds does not automatically void the contract, but it allows one party to make it “voidable.”

    Remedies for Breach of Contract

    • In suing for a breach of contract, it is important that the case be filed within the statute of limitations. Statute of limitations provides the maximum period or the deadline in which claims and lawsuits such as breach of contract may be filed. The limitations set for a case depends on the type of claim, type of case and circumstances surrounding the incident. The federal law allows different types of remedies for cases of breaches of contract. These include: payment of damages, specific performance such as fulfilling the liabilities stated in the contract or making up for losses due to breach of contact, and cancellation and restitution.

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