Law and morals; the role of law in business
Morals are ideas of right and wrong enforced by conscience and society; law is enforced by the State. In business, law creates, protects and regulates transactions.
Law and morals
Morals (ethics) are principles of right and wrong that come from conscience, religion, culture and society. Law is enforced by the State. The two overlap a great deal: murder, theft and fraud are both sinful and criminal, and many legal rules, such as good faith in contracts and partnerships, come from moral ideas. But they are not the same. Some moral wrongs are not crimes, such as ingratitude or refusing to help a stranger. Some laws are morally neutral, such as driving on the left or filing a company's annual return on time. A sensible answer says law and morals are related but distinct.
Law and morals compared
| Point | Law | Morals |
|---|---|---|
| Source | The State: Parliament and the courts | Conscience, religion, culture, society |
| Scope | Mainly outward conduct | Both thoughts and conduct |
| Sanction | Enforced by courts: damages, fines, imprisonment | Guilt, social disapproval, loss of reputation |
| Certainty | Written and fairly certain | Vary between people and places |
| Uniformity | One law for everyone in the country | Differ by religion, culture and person |
| Change | Changed formally by Parliament or the courts | Change slowly as society changes |
The role of law in business
- Gives a legal form: a sole trader, a partnership, or a company incorporated under the Companies Act No. 7 of 2007.
- Makes promises enforceable: contract law lets buyers, sellers, lenders and suppliers rely on each other.
- Protects property: land title, goods, and intellectual property such as trademarks and brand names.
- Regulates employment: hours, wages, leave, EPF and ETF, gratuity and termination.
- Protects consumers: the Consumer Affairs Authority Act controls unfair trade practices such as misleading labels.
- Provides payment tools: cheques, bills of exchange and promissory notes.
- Collects tax: income tax and other taxes collected by the Inland Revenue Department.
- Settles disputes: courts, the Commercial High Court, arbitration and Labour Tribunals.
- Protects society: health, safety and environmental approvals for factories and hotels.
Law is the floor, ethics is the ceiling
A business can be legal but still unethical. Good firms aim to be both.
When a Sri Lankan exporter ships Ceylon Tea, law is present at every step: a contract with the foreign buyer, sale of goods rules on quality, a bank payment instrument, EPF and ETF for the factory staff, and company law for the exporting firm itself.
Short answer: “Give two examples of acts that are immoral but not illegal.” Ingratitude to a benefactor; refusing to help a stranger in need; telling a lie that causes no legal loss.
Structured question: “Distinguish between law and morals.” Compare source, scope, sanction, certainty, uniformity and change. Show the overlap (theft, fraud) and give one example of each that is not the other.
Essay: “Explain the role of law in business, with Sri Lankan examples.” Define law, then explain legal form, contracts, property, employment, consumer protection, payment instruments, tax and dispute settlement, each with a Sri Lankan example. Close on law and ethics.
Law's role in business: F-C-P-E-C-P-T-D: Form, Contracts, Property, Employment, Consumers, Payments, Tax, Disputes.