Malum prohibitum is a Latin term which literally means “wrong because it is prohibited.” In legal terms, it refers to an activity or practice which is illegal because it has been explicitly forbidden or made unlawful by an authority figure or body. It is in contrast to malum in se, which refers to an activity or practice that is wrong or evil in and of itself, regardless of any law or ruling.
For businesses, malum prohibitum laws affect every aspect from the way the company is structured to the way it interacts with customers and clients. The most common malum prohibitum law in business are those related to antitrust regulations and consumer protection. These laws prevent companies and organizations from having monopolies or abusing their power to harm customers or competitors. Other malum prohibitum laws affect taxes, employment, dispute resolution, and more. It’s important that businesses understand what activities are prohibited and what rights and responsibilities they have so they can follow the law properly.
Examples of Malum Prohibitum in Business
One example of malum prohibitum in business is price-fixing. Price-fixing is when two or more companies agree to charge the same price for the same product. This type of agreement is illegal because it limits competition and makes it difficult for consumers to get the best deal. It’s also punishable by fines, jail time, and other serious consequences.
Another example of malum prohibitum in business is false advertising. False advertising is when companies misrepresent products or services to make them seem better than they actually are. This can cause customers to be misled and make bad decisions about what to buy. It can also damage the company’s reputation and can result in legal action or fines.
Conclusion
Malum prohibitum is a concept all businesses should be aware of and understand. These laws prevent companies from abusing their power to hurt their competitors or their customers and ensure fair competition. Businesses should make sure they are familiar with the laws and regulations that apply to them and take steps to ensure they are in compliance.