Ethics and Liability Slides Notes

Professional Ethics and Liability
Pokhara University
Nepal Engineering College
Centre for the Post Graduate Studies
1. General introduction on Morale and Ethics

Moral: Definitions
Moral Adjective, Morale - Noun

a : of or relating to principles of right and wrong in behaviour
b : expressing or teaching a conception of right behaviour
c : conforming to a standard of right behaviour
d : sanctioned by or operative on one's conscience or ethical judgment
e : capable of right and wrong action
2: probable though not proved
3: perceptual or psychological rather than tangible or practical in nature or
effect
-Merriam Webster Dictionary
Morality
Morality - (Latin moralitas "manner, character, proper behaviour")
It is the differentiation of intentions, decisions and actions between those that

are "good" (or right) and those that are "bad" (or wrong).
A moral code is a system of morality (according to a

particular philosophy, religion, culture, etc.) and a moral is any one practice or
teaching within a moral code.
Morality may also be specifically synonymous with "goodness" or "rightness.
An example of a moral code is the Golden Rule which states that, "One should
treat others as one would like others to treat oneself.
The philosophy of morality is ethics.
Morality and ethics
Ethics (also known as moral philosophy) is that branch of philosophy which

addresses questions about morality.
The word 'ethics' is "commonly used interchangeably with 'morality
Likewise, certain types of ethical theories, especially deontological ethics,

sometimes distinguish between 'ethics' and 'morals':
"Although the morality of people and their ethics amounts to the same thing,
there is a usage that restricts morality to systems such as that of Kant, based on
notions such as duty, obligation, and principles of conduct, reserving ethics
for the more Aristotelian approach to practical reasoning, based on the notion of
a virtue, and generally avoiding the separation of 'moral' considerations from
other practical considerations
"Although Morality and Ethics are often used as synonyms,
morals are beliefs based on practices or teachings regarding how people

conduct themselves in personal relationships and in society,
while ethics refers to a set or system of principles, or a philosophy or theory

behind them.
When comparing morality with ethics, the word ethics is often used to refer to a
philosophical analysis of a particular morality, especially when the formal
definition is applied.
There are three major areas of moral philosophy:
1. Meta-ethics Research concerning the nature of morality. It tries to

answer question, such as: What does good, right, or justice mean? What
makes something good or right? Is moral realism true? Is morality irreducible,
cognitive, or overriding? Do intrinsic values exist?
2. Normative theory How do we decide if something is right or wrong?
3. Applied ethics Is x right or wrong? (e.g. Is capital punishment right or

wrong?)
Ethics is the philosophy of morality and meta-ethics is the study of moral

reality, moral knowledge, moral language, and moral psychology.
It investigates the question, What's moral philosophy all about? And many
other related question, such as :
1. What does 'good' and 'bad,' 'right' and 'wrong,' or 'justice' refer to?
2. Are any moral judgments true?
3. Are there moral facts?
4. Are any moral beliefs rational or justified?
5. Can we attain moral knowledge?

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6. How do we know when a moral judgment is probably true or
Rationally justified?
7. Does anything have intrinsic value (value just for existing), or are
all values based on our personal desires and interests?
Morality involves what we ought to do, right and wrong, good and bad, values,
justice, and virtues.
Morality is taken to be important; moral actions are often taken to merit praise
and rewards, and immoral actions are often taken to merit blame and
punishment.
What we ought to do What we morally ought to do is what's morally

preferable. It's morally preferable to give to certain charities and to refrain from
hurting people who make us angry; so we morally ought to do these things.
Sometimes what we ought to do isn't seen as optional. Instead, we often think

we have moral duties (obligations). It might not be a moral duty to give to any
charities, but it seems likely that we often have a duty not to hurt people.
Right and wrong
Something is morally right if it's morally permissible, and morally wrong if it's
morally impermissible. Exame.g- it's morally right to help people and give to
certain charities,
Good and bad Good and bad refer to positive and negative value.
Something is morally good if it helps people attain something of positive value,
avoid something of negative vale, or has a positive value that merits being a
goal. E.g , food is good because it is necessary to attain something of positive
value because it helps us survive; and our survival could have positive value
that merits being a goal.
Something is morally bad if it makes it difficult to attain something of positive

value, could lead to something of negative value, or has a negative value that
merits avoidance. E.g- , starvation is bad because it could lead to suffering; and
suffering could have negative value that warrants its avoidance.
Final ends
Final ends are goals that we think are worthy. Pleasure, survival, and knowledge
are possible examples of goods that should be taken to be promoted as final
ends. Some final ends are also meant to help us avoid something of negative
value, such as our goals to avoid pain and death.
Final ends seem relevant to right and wrong. It seems morally right to try to
achieve our final ends because they are worthy. All things equal, it seems
morally right to try to attain happiness and survive.
Intrinsic values Intrinsic value plays the same role as final endswe think it's
often morally right to try to achieve goals that help people attain intrinsic goods
and we morally ought to do so. However, intrinsic values can conflict.
If pain is intrinsically bad, that doesn't mean we should never allow ourselves or
others to experience pain because there might be intrinsic goods that can be
attained as a result of our pain. For example, homework and learning is often
painful, but the knowledge attained can help us live better lives and could even
be intrinsically good for its own sake.
Justice
Justice refers to our interest in certain ethical issues such as equality, fairness,
and merit.
Virtues
Some people are better at being moral than others. Its important that we know
the difference between right and wrong, attain the skills necessary to reach
demanding moral goals, and find the motivation to do what is morally
preferable. For example, courage is a virtue that involves knowledge of right and
wrong, skills, and motivation.
Praise and blame
We often think that moral behavior merits praise and immoral behavior merits
blame. It often seems appropriate to tell people who have done good deeds,
such as saving lives, that we appreciate it and that what they are doing is good;
and it often seems appropriate to tell people who have done something immoral
that we don't appreciate it and that they did something morally wrong.
Reward and punishment
One way to hold people responsible for their actions is to reward and punish
them for their behavior, and this often seems appropriate. We could give gifts or
return favors to people who help us, and break our friendship or ignore those
who do something immoral.
Moral and Non-moral Standards
Morality refers to is to compare and contrast it to non-moral things that are

sometimes confused with it.
What we morally or nonmorally ought to do We don't just talk about right and
wrong, good or bad, or what we ought to do in moral contexts. This is because
there is both moral and non-moral instrumental value.
Moral instrumental value We ought to do what is necessary to attain moral

goals. For example, we morally ought to get a job and buy food to stay alive. It's
morally right to get a job and buy food, and food has moral instrumental value
insofar as it helps us attain our moral goal of survival.
Nonmoral instrumental value Not all instrumental value helps us achieve

moral goals. We can also have personal goals that have (almost) nothing to do
with morality. For example, I might have a goal of standing on my head and
taking gymnastics classes could be what I ought to do to achieve this goal. The
right thing to do to be able to stand on your head is to take gymnastics classes,
even though it has nothing to do with morality. Additionally, some instrumental
values could even be immoral. For example, I might have a goal to murder
someone and I could say I ought to use a gun if that's the best way to murder
someone. That's not to say that I morally ought to murder anyone.
Etiquette Etiquette tells us how to be polite and show respect within a

culture. Etiquette tells us not to chew our food with our mouths open, to open
doors for people, and not to interrupt people who are talking. Sometimes being
rude and impolite can be morally wrong, but the fact that etiquette and morality
sometimes overlap doesn't mean they are identical or that etiquette is always
relevant to morality.
Law The law tells us what we are or are not allowed to do, and breaking the
law often leads to punishment. What's legal is often based on what's moral, but
not always. For example, it's illegal and immoral to murder people. However, the
fact that legality and morality can overlap doesn't mean they are identical. It
was once illegal to free slaves, but that doesn't mean it was morally wrong; and
it can be legal for a company to pollute or dump toxic waste, but that doesn't
mean it's morally right to do so.
It's hard to pinpoint what morality is about, but we often discuss morality with
ease anyway.
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There are many related ideas concerning morality, such as what we ought to do,
right and wrong, and justice; but these ideas often have a nonmoral counterpart.
This seems clear when we compare moral and nonmoral instrumental value.
Moreover, etiquette and law are often confused with morality, but they are not
identical to morality.
What's polite or legal is often moral, but not always. What's bad etiquette or
illegal can be moral as well.
The dilemma of moral choice
We all face situations every day that require us to make choices or decisions.
Sometimes these are uncomfortable or awkward and demand difficult decision
making.
Situations that generally require asking the ageold question, What is the
ethically right thing to do? are called values or moral dilemmas.
Moral reasoning is a process that helps individuals think through possible

implications and consequences of actions in response to values or moral
dilemmas.
The prevalent interpretation poses moral dilemmas as problems to be solved by

moral theory.
If a problem cannot be solved, the failure to solve it reflects the shortcomings
of
moral theory.
What counts as a moral dilemma is difficult to determine with exactitude, and

few philosophers attempt to provide a fixed definition.
But most philosophers accept that moral dilemmas are those uncertainties in
which an agent must choose between two or more mutually exclusive actchoices, each of which is morally required.
The options might be good courses of action or the avoidance of bad courses of
action.
Moral dilemmas are a subset of the general class of dilemmas, which includes
prudential (Judicial), epistemic (acquiring knowledge), religious, legal, and moral
dilemmas.
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When different domains support the mutually exclusive combinations of choices,

the dilemma is said to be mixed.
Moral Conflicts
Moral conflicts are situations in which one's moral outlook may be reasonably
interpreted as imparting guidance to do two incompatible actions.
There are two major types of moral conflicts: the moral values that give support to each option differ in kind (civic or
familial; to honour parents or serve God
moral conflict arises from mere contingencies of a given situation (for a
mother, which of her children will survive into the future; which twin to
save from drowning)
Moral and
Human and
Behavior
Both options have comparable moral support, but because of the time, location,
and other life constraints, both cannot be performed.
Human
Paragon of animals
Featherless biped
A laughing animal
A rational animal
Man is not only a rational animal but also an animal of particular type, with a
particular and complicated structure, by which his thoughts, feelings and actions are
largely determined
Taoism (about 600 B.C., China)
The individuals great satisfaction in the life was not enjoyed by him as a
member of society, but as a being isolated from every body and being a law on
to himself.
Laws and social institutions were mere devices to cramp his human
development
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Thomas Hobbes (1588- 1679)
Man is the part of the universe and is a machine composed of moving particles
like plants and animal
Man is also a creature of activity, he is always doing and can have no final end
where he can rest
Competition, Difference and Glory are the cause of quarrel
Introduction
John Locke (1632- 1704)
Men were basically Good

Descent
Orderly
Social- minded, and
Capable of moving her/himself
The object of all human action is to substitute pleasure for pain
Human beings are Social, Cooperative and Sympathetic. However there are
some difference in Experience, Strength and Ability which may be due to
Education, Experience and Environment
Jean Jacques Rousseau (1712- 1778)
Human life is Free but Insecure
Moral: Society and the individual
Man is a social animal lives in social groups in communities and in society
Human life and society almost go together
Man is biologically and psychologically equipped to live in groups, in society.
The relationship between individual and society is ultimately one of the profound
of all the problems of social philosophy.
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It is more philosophical rather than sociological because it involves the question

of values.
It is in the society that an individual is surrounded and encompassed by culture,

a societal force.
It is in the society again that s/he has to conform to the norms, occupy statuses and
become members of groups
The question of the relationship between the individual and the society is the
starting point of many discussions.
Modern social rules encourage individuality and separation.
The rights of the individual often take precedence over society
We are progressively more alone.
But are individuals separate from society or a part of society? Is either or both
an illusion? Individuals in society are not 'free agents' as they are constrained by
social rules.
Much social research still separates the individual and society. Society is seen as
a unity of its own, implying boundaries. Individuals are seen as free and
independent, acting a closed systems
In practice, individual and society are closely intertwined and interdependent.
Foundation of individual behavior
Behavior or behaviour is the range of actions and mannerisms made

by organisms, systems, or artificial entities in conjunction with their
environment, which includes the other systems or organisms around as well as
the physical environment.
In humans, behavior is believed to be controlled primarily by the endocrine

system and the nervous system. It is most commonly believed that complexity
in the behavior of an organism is correlated to the complexity of its nervous
system.
Generally, organisms with more complex nervous systems have a greater

capacity to learn new responses and thus adjust their behavior.
Behaviors can be either innate or learned.

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Behavior can be regarded as any action of an organism that changes its relationship to
its environment. Behaviour provides outputs from the organism to the environment
Human behaviour is experienced throughout an individuals entire lifetime. It

includes the way they act based on different factors such as genetics, social
norms, core faith, and attitude.
Behaviour is impacted by certain traits each individual has. The traits vary from
person to person and can produce different actions or behaviour from each
person.
Social norms also impact behaviour. Humans are expected to follow certain
rules in society, which conditions the way people behave.
There are certain behaviours that are acceptable or unacceptable in different

societies and cultures.
Attitude can be defined as "the degree to which the person has a favorable or
unfavorable evaluation of the behavior in question
Factors affecting human

behavior and actions
Genetics: Behaviours result from a combination of genes and these genes can
be affected by different factors such as genes and environment are included in
the growth of any trait. Understanding genetics in relation to behaviour is
difficult and there are many things still being studied about this.
Social Norms: Social norms are essential in understanding human behavior.

Norms is described as an unwritten rule on how society must behave, and what
majority of people believe about others and how they should act in a particular
social group or culture.
Core Faith & Culture: This faith can be through religion, philosophy, culture or
personal belief and often affects the way a person can behave. culture highly
affects human behavior. These differences are able to alter the way different
cultures and areas of the world interact and act.
Attitude: An attitude is an expression of favor or disfavor toward a person,

place, thing, or event. The interesting thing about an attitude and human
beings is that it alters between each individual. Everyone has a different attitude
towards different things. A main factor that determines attitude is likes and
dislikes. Positive attitudes are better than negative ones as negativity can bring
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on negative emotions that most of the time can be avoided. As humans, it is up

to us to make sure our attitudes positively reflect the behaviors we want to
show.
Foundation of individual behavior

Mainly three foundations of individual behavior are important in organizations:
Ability,
Attitudes, and
Learning
How intellectual ability contributes to job performance?

How employees attitudes about their jobs affect the workplace?
How people learn behaviours?
What management can do to shape those behaviours?
Ability
Ability refers to an individuals capacity to perform the various tasks in a job. It

is a current assessment of what one can do.
Managers are less interested in whether people differ in terms of their abilities
and more interested in knowing how people differ in abilities and using that
knowledge to increase the likelihood that an employee will perform his or her job
well.
Intellectual ability which encompasses mental actives such as thinking,

reasoning, and problem solvingis one of the best predictors of performance
across all sorts of jobs.
Physical ability - The capacity to do tasks demanding stamina, dexterity,

strength, and similar characteristics.
Attitude
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Attitudes are evaluative statementseither favorable or unfavorable

concerning objects, people, or events. They reflect how one feels about
something.
When I say I like my job, I am expressing my attitude about work.
To fully understand attitudes, we need to consider their fundamental properties.
Main components of attitudes Cognitive, Affective, Behavioral
Components of attitudes
Typically, researchers have assumed that attitudes have three components:

cognition, affect, and behavior. Lets look at each of these components.
The statement that discrimination is wrong is evaluative.
Such an opinion is the cognitive component of an attitude. It sets the stage for
the more critical part of an attitude: its affective component. Affect is the
emotional or feeling segment of an attitude and is reflected in the statement
I dont like Jon because he discriminates against minorities
Affect can lead to behavioral outcomes. The behavioral component of an

attitude refers to an intention to behave in a certain way toward someone or
something.
So, to continue our example, I might choose to avoid Jon because of my

feelings about him.
Viewing attitudes as made up of three componentscognition, affect, and

behavioris helpful in understanding their complexity and the potential
relationship between attitudes and behavior.
Learning
Learning
Any relatively permanent change in behavior that occurs as a result of

experience
Theories of Learning
Classical Conditioning
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Operant Conditioning
Social-Learning Theory
Classical conditioning
Behavior depends on consequences (money, smiles,)
Positive consequences: repeat.
Negative consequences: do no repeat.
Operant conditioning
slow, rewards, punishment.

Test and fail
Shaping
By observing what happens to other people.
Quick
SLIDE 2
2. Ethics:
Introduction to Ethics
Use of Ethics
Characteristics
of
Ethical
problems
Approaches of Ethical decision
making
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1. Introduction to Ethics
If you live by yourself on an island, you have only yourself to consider. When you
band together with other people, however, your actions can affect the group of
which you are a part.
Throughout the history, the group has attempted to set limits on the behaviors
of individuals in the perceived best interest of the group and or even individuals.
Group-living has always involved a compromise between enjoying individual

freedom and protecting the best interests of the groups. So, how an individuals
freedom can best be protected against the interest of the society is the concern.
This concern has long been dealt with the study of Ethics. The study of Ethics is
the study of how to live in group.
Western history: Ancient Greece

Socrates: the Socratic method of reasoning
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the unexamined life is not worth living

Plato (Socrates student):
Realms of reality: realm of forms (perfect) and realm of appearance (imperfect)
Tripartite soul:
Faculty of reason->thought and truth->head
Faculty of spirit->eternal life, love, beauty ->chest
Faculty of appetite->human desire and emotions-->guts
Allegory of the cave
Aristotle (Platos student): more practical approach to reasoning. He believes in

the importance of empirical inquiry.
In nichomachean ethics, aristotle (trans,2002) discussed practical wisdom

(phronesis) as being necessary for deliberation about what is good and
advantageous if people want to move toward their human purpose or desire end
goal of eudaimonia (happiness or well-being) aristotle believe that a person
needs education to cultivate phronesis, which is intellectual excellence.
Middle Ages (Dark Ages)
Christianity becomes the dominant religion (monotheistic) while Greece was

(polytheism).
Catholic saints, Augustine and Aquinas:
Both men were influenced by the Ancient Greeks.
Augustine(354-430 C.E.) "Plato of the Middle Ages.:
His belief in a heavenly place of unchanging moral Truth is similar to Platos

belief in the realm of ideal Forms.
These truth are imprinted by God on the soul of each human being.
He believed in the existence of good .

So evil is present when good is missing.
Thomas Aquinas (1224-1274):

Christianized version of Aristotles ethical teaching.
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Believed that people have a desirable end goal or purpose and that practicing
excellences of character (virtues) leads to human happiness and good moral
reasoning.
Virtue ethics and natural law theory!!
Modern philosophy and
the age of enlightenment
The scientific revolution began.
Human moral reasoning based on people being autonomous (self-direction),

Rational thinking creatures rather than being influenced and controlled by
Church dogma and rules.
Reductionists: hope that after most or all knowledge was discovered the
universe and human behavior could be predicted and controlled
A mechanistic approach: is one that focuses one fixing problems as if one is

fixing a machine.
Postmodern era
Pence (2000) defined postmodernist as a modern movement in philosophy and

the humanities that reject the optimistic view that science and reason will
improve humanity; it rejects the notion of sustained progress through reason
and the scientific method (p.43)
The postmodern mind is one that is formed by a pluralistic view or a diversity of

intellectual and cultural influences.
Care-based reasoning versus

justice-based reasoning
Care approach is associated with a feminine way of thinking.
Cure approach is associated with a masculine Enlightenment-era way of thinking
Lawrence Kohlberg (1981) defined six stages of moral development ranging from
childhood to adulthood. Also he didnt include any women in his study.
Carol Gilligan ,raised the concern of gender bias.
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In her book In a Different Voice (1982),she argued that womens moral reasoning
is different ,but it is not deficient.
Kohlberg's is a male-oriented ethics of justice.
Gilligans is a more feminine ethic of care.
Eastern ethics
Ethics in Asian societies has similarities to and important differences from

western ethics.
similarities: intertwined with spiritual and religious thinking. Both examined

human nature and what is needed for people to move toward well-being.
Differences: the western ethics is generally for people to achieve self-direction

and to understand themselves personally.
The eastern ethics often is to understand universal interconnections, to be

liberated from the self. Although, eastern ethics is not imposed from outside of a
person but is instead imposed from within oneself.
Indian Ethics:
Hinduism
The main emphasis in Hindu ethics is cosmic unity.
It originated with writings called the Vedas (c. 2000 to 1000 B.C.E.) that include
magical, religious, and philosophical teachings.
People are believed to be stuck in Maya,(an illusory, everyday, impermanent

experience).
The quality of one's past actions, karma, influences one's present existence and
future incarnations or rebirths.
Therefore, people need to improve the goodness of their actions, which will
subsequently improve their karma.
Indian Ethics:
Buddhism
Siddhartha Gautama (6th century B.C.E.) was a Hindu prince.
The Buddha's core teachings, are called the Four Noble Truths:
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The First is that unsatisfactoriness or suffering (dukkha) exists as a part of all

forms of existence.
The Second and Third suggest that the cause of suffering is attachment (clinging
or craving).
The Fourth contains the path for transforming suffering into enlightenment or
liberation.
This path is called the Eightfold path, and it is composed of eight right
practices: Right View, Right Thinking, right Mindfulness, Right Speech, Right
Action, Right Diligence, Right Concentration, and Right Livelihood.
Chinese Ethics:
Taoism
Lao-tzu(c,571 B.C.E)who wrote the Taoist guide to life.
Taoist philosophy underscores the flux and balance of nature through yin(dark)
and yang(light) elements.
living well or ethically is living authentically, simply, and unselfishly in harmony

and oneness with nature.
Chinese Ethics:
Confucianism
Kung Fu-tzu(551 to 497 B.C.E).
Confucian ethics is described through the concepts of li and yi.
Li provides guidance to social orders and how humans should relate to one
another.
Yi emphasizes the importance of ones motivations toward achieving rightness

rather than emphasizing consequences.
Confucianism is communitarian ethical systems in which social goals, the good

of society, and the importance of human relationships are valued.
The Moral Views of Socrates
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The history of hortatory ethical speculation can be interpreted in the light of the
attempt to answer two questions:
1 What is the good life for humankind?
2 How ought humans, insofar as they are moral beings, to behave?
Socrates' answers to these questions are as follows:

1 People ought to act in such a way as to achieve the good life.
2 The good life can be discovered if and only if people have knowledge.
The \Socratic paradox": although people in fact act immorally, none do so

deliberately.
Socrates believed that if a person knows what is good, then they will always act
in such a way as to try to achieve it.
virtue is knowledge"
nobody errs willingly"
Plato's Ethics
Plato differs from Socrates not only in believing that knowledge of the good is
possible, but also in specifying how one can go about achieving it.
Plato's contention is that discovering the nature of the good is an intellectual

task analogous to that required in order to uncover a fundamental scientific
principle.
The search for the good life is then tied to the theory of knowledge.
Plato's blueprint for an ideal social organization contained two highly dissimilar
proposals for educating people, depending upon whether or not they have the
capacity to acquire knowledge.
Plato argued that moral standards are just as objective as the principles of
physics or the theorems of mathematics. Those who think morality is merely a
matter of opinion think so because they lack the knowledge to judge otherwise.
Aristotle's Ethics
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Aristotle's ethics are an attempt to answer two questions:

1 What is the good life?
2 How ought a person, insofar as they are moral, to act?
Aristotle's ethics form a far more empirical theory than Plato's, less hostile to
pleasure as a component of the good life, and positively opposed to the Platonic
conception that moral laws have a validity independent of human interests,
attitudes, desires, and tastes.
For Aristotle, no specification of the good life will be adequate which does not
take into account a person's unique nature.
The good life must be one which is good for humans, and since humans are,
above all, rational beings, the good life will be one which must be conducted
under the governance of reason.
Kantianism
Immanuel Kant (1724 1804) a German philosopher
Peoples wills should be based on moral rules
Therefore its important that our actions are based on appropriate moral rules.
To determine when a moral rule is appropriate Kant proposed two Categorical

Imperatives
1.
Act only from moral rules that you can at the same time universalize.
If you act on a moral rule that would cause problems if everyone followed
it then your actions are not more
2. Act so that you always treat both yourself and other people as ends in
themselves, and never only as a means to an end.
If you use people for your own benefit that is not moral
Ethics: ???
Sociologist Raymond Baumhart asked business people, "What does Ethics mean
to you?" Among their replies were the following:
"Ethics has to do with what my feelings tell me is right or wrong.

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"Ethics has to do with my religious beliefs.

"Being ethical is doing what the law requires.
"Ethics consists of the standards of behavior our society accepts.
"I don't know what the word means."
These replies might be typical of our own. The meaning of "ethics" is
hard to pin down, and the views many people have about ethics are shaky
Most people confuse ethics with behaving in accordance with social
conventions, religious beliefs, and the law", and don't treat ethics as a
stand-alone concept.- Tomas Paul and Linda Elder
Many people tend to equate ethics with their feelings. But being ethical is clearly
not a matter of following one's feelings. In fact, feelings frequently deviate from
what is ethical.
Ethics, however, cannot be confined to religion nor is it the same as religion.
laws, like feelings, can deviate from what is ethical. Our own pre-Civil War
slavery laws and the old apartheid laws of present-day South Africa are
grotesquely obvious examples of laws that deviate from what is ethical.
In any society, most people accept standards that are, in fact, ethical. But
standards of behavior in society can deviate from what is ethical. An entire
society can become ethically corrupt. Nazi Germany is a good example of a
morally corrupt society.
The early Greek attempted to understand the meaning of life and is considered
by many to have begun the development of a Reasoned Philosophy of Ethics.
The teachings of Socrates, Plato, and Aristotle culminated in Nichomachus
Ethics, named after the name of Aristotles son - Nichomachus.
Plato said that philosophy begins in wonder. Ethics as branch of philosophy

arises from the curiosity about the values involved in the human behavior.
The ultimate goal of the quest of human life is usually mentioned by the words
like, The Good, the Highest Good, the Supreme Good or End, Summum Bonum
etc.
Aristotle debated at length the meaning of the word Good as well as the
concept of Justice and happiness.
Ethics - Definition
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Derived from the Latin word Ethos- the space where people living together
Later it covered the Custom, Usage and Habit
Ethics is related with moral but it is not exactly morale
The word `moral is derived from the Latin word `mores which also means
customs, usages or habits
Morality is the standard of behavior by which people are judged but Ethics is a
system of belief that supports a view of morality, the aim of ethics is to define
the nature of the Highest good of a man as a member of society
Ethics is related with human conduct, character and values. Ethics also explores
into the problem of practical life i.e. morality.
Literally, Ethics is the science of customs or collective habits of men. Any custom
has a reference to the community. Customs are the ways of acting, approved by
the group.
Paulsen defines Ethics as a science of customs or morals.
According to Mackenzie, Ethics is the study of what is good or right in conduct.
For Seth, as the science of the Good, Ethics is the science par excellence of the
ideal and the ought.
For Jadunath Sinha, Ethics is the science of the Highest Good.
Lillies definition is a comprehensive definition. According to William Lillie,

Ethics is a normative science of the conduct of human beings living in societies
science which judges this conduct to be right or wrong, good and bad.
Therefore, Ethics is The science of custom and habit
The science of character and conduct
The science of rightness and wrongness
The science of morality and
The normative science
Ethics is
23
Standards of behavior that tell us how human beings ought to act in the many
situations in which they find themselves - as friends, parents, children, citizens,
business people, teachers, professionals, and so on.
\
2. Use of Ethics
It exposes the inconsistent measures, defects and discriminations of the social

customs and habits
It helps to remove incorrect ideas and hence to reduce possibilities of wrong

actions
It helps to determine the duties of life with reference to moral ideas
It helps to rationalize our notion of right or wrong
It influences directly/indirectly in all sphere of our life
Examples Lay off of the employees

Pounding on upstream side of a dam
Operating Cigarette and Bear factories
Child workers
Ethics studies the moral behaviour in human, and how one should act. It may be
divided into four major areas of study which include:
Meta-ethics, about the theoretical meaning and reference of moral propositions

and how their truth-values (if any) may be determined;
Normative ethics, about the practical means of determining a moral course of

action;
Applied ethics, about how moral outcomes can be achieved in specific situations;
and
Descriptive ethics also known as comparative ethics, about what moral values
people actually abide by.
24
Within each of these branches are many different schools of thought and still
further sub-fields of study.
Use of Ethics: Area and Nature of Ethics
The nature of Ethics can be stated as follows:-
Ethics is a science:
Ethics aims at systematic explanation of its subject matter. It
systematically aims at explanation of rightness and wrongness in human
conduct with reference to ideals. It systematically classifies our actions
into voluntary, involuntary, moral, nonmoral and evaluates them.
Ethics is a normative science:

Every individual has three faculties viz. Cognitive, Affective and Conative
(knowing, feeling and willing or acting).there are 3 ideals in human life
corresponding to the three aspects of human nature. Truth, Beauty, and
Good are the Supreme Ideals. Logic, Aesthetics and Ethics study the ideals
of Truth, Beauty and Good respectively.
The ideals in normative science cannot be proved. In the other words
values cannot be proved; they are to be approved.
The nature of Ethics:
Ethics is the science of ideals involved in human conduct:

Conduct is the assimilation of choice of Ends and choice of means with
some purpose. Thus Ethics is the science of ideals (Ends) involved in
human conduct.
Ethics evaluates human action:

Ethics is a discipline which considers human actions from the viewpoint of
ethical norm or standard. It studies what is good or right in human
conduct. Ethics evaluates conduct with reference to the Summum Bonum
of human being.
Ethics is related with Values:

Ethical questions are value-oriented questions. Value judgments are
complex products of intuition, sense experience and reason. Values are
25
necessarily associated with choice of activities. We have to select the

action that is consistent with promotion of life, live organized rational life.
The nature of Ethics
Ethics: A Theoretical science or a Practical science?

Many Western thinkers believe that Ethics is not a practical science as it
gives us knowledge of guiding principles but does not tell us how to apply
them. . A practical science teaches us to know how to do. It is concerned
with means for the realization of a definite end. E.g. medical science.
However, in Indian context, Ethics is a practical science. Different schools
of Indian Philosophy prescribe the supreme end of life (mostly liberation)
and prescribe the path to attain it. The ethics of Bhagawad Gita prescribes
the duties of individual.
Ethics is not an Art :

According to Mackenzie, the difference between ethics and art : Art is connected to a particular field of skill such as painting, dancing, etc.
Ethics is connected with the whole life of an individual.
There are four branches of Ethics - Descriptive Ethics, Normative Ethics, MetaEthics and Applied Ethics.
Descriptive Ethics
Descriptive Ethics is the study of peoples beliefs about morality. It
involves empirical investigation. It gives us a general pattern or a way of
life of people in different types of communities. It studies the history and
evolution of Ethics.
Normative Ethics
Normative Ethics is also called as prescriptive ethics is the study of ethical
theories that prescribe how people ought to act. It examines standards for
the rightness and wrongness of actions. Normative Ethics suggests
punishment when a person deviates from the path of ideals. It provides
justification for punishing a person who disturbs social and moral order.
There are four branches of Ethics - Descriptive Ethics, Normative Ethics, MetaEthics and Applied Ethics.
Descriptive Ethics
26
Descriptive Ethics is the study of peoples beliefs about morality. It

involves empirical investigation. It gives us a general pattern or a way of
life of people in different types of communities. It studies the history and
evolution of Ethics.
Normative Ethics
Normative Ethics is also called as prescriptive ethics is the study of ethical
theories that prescribe how people ought to act. It examines standards for
the rightness and wrongness of actions. Normative Ethics suggests
punishment when a person deviates from the path of ideals. It provides
justification for punishing a person who disturbs social and moral order.
Four branches of Ethics:-
Meta- Ethics
Meta Ethics is the study of what ethical terms and theories actually refer
to. It determines the validity of theories advanced in Normative Ethics. We
use certain moral concepts such as right, wrong, good or bad to evaluate
human actions.
Meta Ethics deals with the questions such as What is the meaning o f
moral terms or judgments?, What is the nature of moral judgments?,
How may moral judgments be supported or defended?
Applied Ethics
It deals with the problems confronted in our life. It attempts to apply
ethical theory to real life situations. It helps to use knowledge of moral
principles to present dilemmas.
Applied Ethics guides the individuals facing conflicting situation. Some
critical moral issues arise due to the insensible and irresponsible attitude
of human beings without any concern to other children of Mother Nature.
3. Characteristics of Ethical problem
Engineering Ethics
The field of applied ethics which examines and sets standards for engineers
obligation to the Public, their Clients, Employers and Profession.
27
Ethical Approaches mostly influenced by whether the engineers are

independently providing professional service or government service or
production enterprises.
Ethical Dilemma for an Engineer
A basic ethical dilemma is that an engineer has the duty to report to the
appropriate authority a possible risk to others from a client or employer failing to
follow the engineer's directions.
According to first principles, this duty overrides the duty to a client and/or
employer. An engineer may be disciplined, or have their license revoked, even if
the failure to report such a danger does not result in the loss of life or health.
A basic ethical dilemma is that an engineer has the duty to report to the
appropriate authority a possible risk to others from a client or employer failing to
follow the engineer's directions.
According to first principles, this duty overrides the duty to a client and/or
employer. An engineer may be disciplined, or have their license revoked, even if
the failure to report such a danger does not result in the loss of life or health.
In many cases, this duty can be discharged by advising the client of the
consequences in a forthright matter, and assuring the client takes the engineer's
advice. However, the engineer must ensure that the remedial steps are taken
and, if they are not, the situation must be reported to the appropriate authority.
In very rare cases, where even a governmental authority may not take
appropriate action, the engineer can only discharge the duty by making the
situation public.
As a result, whistleblowing by professional engineers is not an unusual event,

and courts have often sided with engineers in such cases, overruling duties to
employers and confidentiality considerations that otherwise would have
prevented the engineer from speaking out
Most significant decisions in organizations are not only complex but could be
considered dilemmas, because they involve fundamental conflicts between a set
of economic and self-interest considerations and a competing set of ethical,
legal, and social considerations.
These competing considerations favour different alternatives.
While developing creative alternatives can help reduce the conflict, some
tension almost always remains.
28
Some individuals avoid the more difficult task of trying to balance these
conflicting factors by arguing that organizations and managers should consider
economic (organizational self-interest) considerations exclusively.
Others simplify by over-emphasizing the social responsibility of organizations

and their managers.
Ethical Dilemma for an Engineer: Characteristics of Ethical

problem
Our ethical framework is founded on the values we hold and believe to be

important. Values are a set of moral principles we embrace about what is
"good," "desirable," "just, "and "of value" in human actions and interactions.
We use these principles (values) to evaluate choices and actions.
Ethical decisions are almost always complex for several reasons because they
have:(a) multiple alternatives;
(b) consequences that extend beyond the immediate situation;
(c) uncertain consequences;
(d) mixed outcomes: economic, legal, and social benefits and costs; and
(e) personal implications
29
4. Approaches to Ethical
Decision Making:
Ethical Problems for Moral Reasoning
Eternal Law
Ethical Egoism
Utilitarianism
Universalism
Enlightened Self interest
Ethics of Interdependence
Distributive Justice
Personal Liberty
Eternal Law: Moral standards are given in an Eternal Law, which is revealed in
scripture or apparent in nature, and then is interpreted by religious leaders or
philosophers. The belief is that everyone should act in accordance with the
interpretation
Ethical Egoism: Centres around the standpoint of the individual. The belief is
that individuals should seek their own self-interests, and act to promote the
greatest balance of good over bad for themselves. Ethical egoism might be seen
as the usual standard for businesses in a free market system.
Utilitarianism: Moral standards are applied to the outcome of an action or

decision (a teleological theory) for, not only oneself, but for all those affected by
the action. The principle is that everyone should act to generate the greatest
benefits for the largest number of people (i.e, the highest net social benefit to
society, the "greatest good for the greatest number" ...or maximize the social
benefit function). An act is "right" if, and only if, it produces greater net benefits
for society than any other act possible under the circumstances.
In using this system one needs to consider both positive benefits and negative
costs/outcomes, also satisfactions such as health, friendships in addition to
material ones. Most advocates of this system say we should consider utilities
30
equally for everyone in society, although some suggest weighting [Jeremy

Bentham (1748-1832)]
Universalism: Moral standards are applied to the intent of an action or

decision, because the outcomes are so indefinite and uncertain at the time the
decision to act is made. The principle is that everyone should act to ensure that
similar decisions would be reached by others, given similar circumstances. This
is a deontological (duties or obligations) approach,
The first duty of Universalism is to treat others as ends and not means. Kant
(1724-1804) proposed a simple test for personal duty and goodwill, to eliminate
self-interest and self-deception, and to ensure regard for the moral worth of
others: ask whether you would be willing to have everyone in the world, faced
with similar circumstances, be forced to act in exactly the same way (the
Categorical Imperative) ...i.e., to make a decision and act as if your basis for
action were to become a general law binding on everyone)
Enlightened Self interest: This system is a hybrid of utilitarianism and egoist

theory. It may be thought of as "self-interest rightly understood by a reasonable
person.
By this definition a truly ethical person will recognize that his/her own long-term
interests and those of society are much the same. Using this framework, a
person might ask: how am I likely to judge this action from my deathbed?
Ethics of Interdependence: Confucius taught that conflicts should be resolved

by amicable compromise, thereby allowing nature to follow its harmonious
course. In this system, reasonable people will always be capable of compromise
and each side is obligated to try to provide what the other side needs to achieve
its goals and fulfil itself. Any other kind of behaviour is insincere, exploitive,
contentious, and unethical.
Enlightened Self interest: This system is a hybrid of utilitarianism and egoist

theory. It may be thought of as "self-interest rightly understood by a reasonable
person.
By this definition a truly ethical person will recognize that his/her own long-term
interests and those of society are much the same. Using this framework, a
person might ask: how am I likely to judge this action from my deathbed?
Ethics of Interdependence: Confucius taught that conflicts should be resolved

by amicable compromise, thereby allowing nature to follow its harmonious
course. In this system, reasonable people will always be capable of compromise
and each side is obligated to try to provide what the other side needs to achieve
31
its goals and fulfil itself. Any other kind of behaviour is insincere, exploitive,
contentious, and unethical.
Distributive Justice: Moral standards are based on the primacy of a single

value, justice. Everyone should act to ensure a more equitable distribution of
benefits, for this promotes individual self-respect, which is essentially for social
cooperation. [This and Personal Liberty are two modem ethical systems
developed by two different professors at Harvard - this by John Rawls]
Personal Liberty: Moral standards are based on the primacy of a single
value, liberty. Everyone should act to ensure greater freedom of choice,
for this promotes market exchange, which is essential for social
productivity. This system is espoused by libertarians. [developed by Robert
Nozick at Harvard]
A formalized approach
to reflection and
analysis of morality
Four Step Process
Step I: Recognize and define the ethical issue (realm, individual process and
situation)
Step II: Reflect
Step III: Decide the right thing to do
Step IV: Implement, evaluate and reassess
Components of the RIPS Model

Realm
Individual Process
32
Ethical Situation
Individual
Moral Sensitivity
Problem or issue
Institutional/
Moral Judgment
Temptation
Organizational
Moral Motivation
Distress
Societal
Moral Courage
Dilemma
Silence
STEP- I Realm
Individual realm: concerned with the good of the patient/client and focuses on
rights, duties, relationships and behaviors between individuals
Institutional/organizational realm: concerned with the good of the organization

and focuses on structures and systems that will facilitate their goals
Societal realm: concerned with the common good
Individual Process
Moral sensitivity: recognizing, interpreting and framing ethical situations
Moral judgment: deciding between right and wrong actions; considering ethical
principles (autonomy, etc), then selecting and applying them
Moral motivation: prioritizing ethical values over financial gain or self-interest
Moral courage: implementing the chosen ethical action, even though doing so
may cause adversity
Ethical Situation
Problem or issue: a situation in which important moral values are being

challenged
Temptation: a situation in which a choice must be made between a right action

and a wrong action, where the wrong action may benefit the decision-maker in
some way
Silence: key parties realize ethical values are being challenged, but do nothing
33
Distress
Dilemma
Ethical Distress
\Ethical distress: there is a structural barrier to doing the right thing

Type A: There is a barrier keeping you from doing what you know is right
Type B: There is a barrier because something is wrong, but you are not
sure what that something is
Ethical Dilemma
There are two (or more) correct courses of action that cannot both be followed.
You are doing something right, and also something wrong.
Most often involve ethical conduct (e.g. honoring autonomy vs. preventing
harm).
May involve conflicting traits of character (e.g. honesty vs. compassion)
Step II: Reflect
What are the relevant facts and contextual information?
Who are the major stakeholders?
What are the potential consequences, intended or unintended?
What are the relevant laws, duties, and ethical principles?
What professional guidance do we have?
What do the right vs. wrong tests suggest you should do?
Right vs. Wrong
The legal test: Did anyone do anything illegal?

34
The stench test: Does the situation smell wrong?
Publicity (the front page test): Would any of the parties involved be
embarrassed by the truth coming out?
Universality (the mom test): What would your mom do? Is this the right thing
to do regardless of whos involved?
The ethics test: Do the Code of Ethics, the Guide to Professional Conduct, or
Professionalism in Physical Therapy: Core Values, say anything about this
situation?
Step III: Decide What To Do
Rule-based: Follow only the principle you want every one else to follow
(deontological)
Ends-based: Do whatever produces the greatest good for the greatest number
(teleological)
Care-based: Do onto others as you would have them do onto you (the golden
rule)
Step IV: Implement,

Evaluate and Reassess
Implement: moral courage (role-play, prepare, imagine)
Evaluate and reassess

Did things turn out the way you expected?
What did you do well? Not so well?
What were the most challenging aspects of this situation?
How did this situation compare with others you have encountered or read
about?
How will this experience make you a better professional?
Study Reference
35
RULES OF THUMB FOR ETHICAL DECISION

MAKING
Golden Rule:
Do unto others as you would have them do unto you.
Disclosure Rule: If you are comfortable with an action or decision after

asking yourself whether you would mind if all your
associates,
friends, and family were aware of it, then you should act or decide.
The Intuition Ethic:
Do what your gut feeling tells you to do.
The Categorical Imperative: You should not adopt principles of action

unless they can, without inconsistency, be adopted by everyone
else.
The Professional Ethic:
Do only what can be explained before a
committee of your professional peers.
The Utilitarian Principle:
number.
The Virtue Principle:
Do the greatest good for the greatest
Do what demonstrated the virtues expected.
Principle Source: A.B. Carroll, Principles of Business Ethics: Their Role in

Decision making and Initial Consensus,
Management Decision, 28:8 (1990): 2024, see Figure 3
Character
Integrity
Courage
Process
36
FUNDAMENTAL INTERESTS OF STAKEHOLDERS
SOURCES: Mitchell, Agle, and Wood, 1997; Rowley, 1997.
37
3. Professionalism
Code of Ethics:
and
Introduction to Professionalism
Characteristics of Profession
Factors Affecting Moral of a
Profession
Code of Ethics of Engineering
Societies
38
Introduction to Professionalism
Profession
\Carpenter working in a Furniture shop
Section Officer in a ministry
An Engineer Working in a highway project
A Doctor working in a private clinic
A profession is something a little more than a job, it is a career for someone that
wants to be part of society, who becomes competent in their chosen
sector through training; maintains their skills through continuing professional
development (CPD); and commits to behaving ethically, to protect the interests
of the public.
We all rely on professionals at many points of our lives from dentists to

teachers, from pension managers to careers advisers, from town planners to
paramedics. We rely on professionals to be experts and to know what to do
when we need them to.
A profession is a vocation founded upon

specialized educational training, the purpose of which is to supply
objective counsel and service to others, for a direct and definite
compensation, wholly apart from expectation of other business gain.
A profession has been further defined as: "a special type of occupation...
(possessing) corporate solidarity...prolonged specialized training in a body of
abstract knowledge, and a collectivity or service orientation...a vocational subculture which comprises implicit codes of behaviour, generates an esprit de
corps among members of the same profession, and ensures them certain
39
occupational advantages...(also) bureaucratic structures and monopolistic

privileges to perform certain types of work...professional literature, legislation,
etc."
Medieval and early modern tradition recognised only three

professions: divinity, medicine, and lawthe so-called "learned professions".
Major milestones which may mark an occupation being identified as a profession

include.
an occupation becomes a full-time occupation
the establishment of a training school
the establishment of a university school
the establishment of a local association
the establishment of a national association
the introduction of codes of professional ethics
the establishment of state licensing laws
a paid occupation, especially one that involves prolonged training and a formal
qualification
According to the Directive on Recognition of Professional Qualifications

(2005/36/EC)-
those practised on the basis of relevant professional qualifications in a

personal, responsible and professionally independent capacity by those
providing intellectual and conceptual services in the interest of the client and
the public.
Formation of a profession
A profession arises when any trade or occupation transforms itself through "the
development of formal qualifications based upon education, apprenticeship, and
examinations, the emergence of regulatory bodies with powers to admit and
discipline members, and some degree of monopoly rights."
Regulation
Originally, any regulation of the professions was self-regulation through bodies

such as the College of Physicians or the Inns of Court. With the growing role of
government, statutory bodies have increasingly taken on this rle, their
40
members being appointed either by the profession or (increasingly) by

government
Autonomy
Professions tend to be autonomous, which means they have a high degree of

control of their own affairs: "professionals are autonomous insofar as they can
make independent judgments about their work". This usually means "the
freedom to exercise their professional judgement.
"Professional autonomy is often described as a claim of professionals that has to

serve primarily their own interests...this professional autonomy can only be
maintained if members of the profession subject their activities and decisions to
a critical evaluation by other members of the profession.
The concept of autonomy can therefore be seen to embrace not only judgement,
but also self-interest and a continuous process of critical evaluation of ethics and
procedures from within the profession itself.
Status and prestige
Professions enjoy a high social status, regard and esteem conferred upon them
by society.
All professions involve technical, specialised and highly skilled work often
referred to "professional expertise.
Power
All professions have power and is used to control its own members, and also its
area of expertise and interests.
A profession tends to dominate, police and protect its area of expertise and the
conduct of its members, and exercises a dominating influence over its entire
field which means that professions can act monopolist, rebuffing competition
from ancillary trades and occupations, as well as subordinating and controlling
lesser but related trades.
A profession is characterized by the power and high prestige it has in society as

a whole
Codes for Professions

41
Requirements to be a Profession Professional
Requires extensive skills
Judgment: decision based on academic/formal training, gives serous impact to

lives of people
Discretion- in performing ones duty and keeping confidentiality of patent
Is Carpentry a Profession?
Carpentry
Require special skills
But many work can be mechanized
A little judgment and discretion required
Training in Carpentry not formal but rather is practical
So Carpentry doesnt meet the requirements to be a profession
Characteristics of a Professions
Larson says profession and professionals as
"high standards of professional and intellectual excellence,
"professions are occupations with special power and prestige,
"an exclusive elite group,
Members of a profession have also been defined as "workers whose qualities of

detachment, autonomy, and group allegiance are more extensive than those
found among other groups...their attributes include a high degree of systematic
knowledge; strong community orientation and loyalty; self-regulation; and a
system of rewards defined and administered by the community of workers."
There is considerable agreement about defining the characteristic features of a

profession, they have a
Professional Association,
42
Cognitive Base,
Institutionalized Training,
Licensing,
Work Autonomy,
Colleague Control... (and)
Code Of Ethics
THE FUNDAMENTAL CHARACTERISTICS OF A PROFESSION:
Great responsibility
Professionals deal in matters of vital importance to their clients and are
therefore entrusted with grave responsibilities and obligations.
Accountability
Professionals hold themselves ultimately accountable for the quality of their
work with the client. The profession may or may not have mechanisms in place
to reinforce and ensure adherence to this principle among its members. If not,
the individual professional will (e.g. guarantees and/or contractual provisions).
Based on specialized, theoretical knowledge

Professionals render specialized services based on theory, knowledge, and skills
that are most often peculiar to their profession and generally beyond the
understanding and/or capability of those outside of the profession.
Professions typically require a significant period of hands-on, practical

experience in the protected company of senior members before aspirants are
recognized as professionals. After this provisional period, ongoing education
toward professional development is compulsory. A profession may or may not
require formal credentials and/or other standards for admission.
Autonomy
Professionals have control over and, correspondingly, ultimate responsibility for
their own work. Professionals tend to define the terms, processes, and conditions
of work to be performed for clients (either directly or as preconditions for their
ongoing agency employment).
Clients rather than customers

Members of a profession exercise discrimination in choosing clients rather than
simply accepting any interested party as a customer (as merchants do).
43
Direct working relationships

Professionals habitually work directly with their clients rather than through
intermediaries or proxies.
Ethical constraints
Due to the other characteristics on this list, there is a clear requirement for
ethical constraints in the professions. Professionals are bound to a code of
conduct or ethics specific to the distinct profession (and sometimes the
individual).
Merit-based
In a profession, members achieve employment and success based on merit and
corresponding voluntary relationships rather than on corrupted ideals such as
social principle, mandated support, or extortion (e.g. union members are not
professionals). Therefore, a professional is one who must attract clients and
profits due to the merits of his work
Capitalist morality
The responsibilities inherent to the practice of a profession are impossible
to rationally maintain without a moral foundation that flows from a recognition of
the singular right of the individual to his own life, along with all of its inherent
and potential sovereign value; a concept that only capitalism recognizes,
upholds and protects
Morality and ethics
"Although Morality and Ethics are often used as synonyms,
morals are beliefs based on practices or teachings regarding how people

conduct themselves in personal relationships and in society,
while ethics refers to a set or system of principles, or a philosophy or theory

behind them.
When comparing morality with ethics, the word ethics is often used to refer to a
philosophical analysis of a particular morality, especially when the formal
definition is applied.
44
Code of Ethics
Codes of Ethic express

The right
Duties
Obligations of the members of the profession
The main objectives of the engineering code of ethics are to

(i) protect the public,
(ii) protect and further develop the profession.
Code of Ethics :Definitions
Help create environment within a profession where ethical behavior is the norm
Serves as a guide or reminder of how to act in a specific situation
Code provides a backup for an individual who is being pressured by a superior to

behave unethically
A support for a collective sense of correct behavior
Code can indicate to others that the profession is seriously concerned about
responsibility, professional conduct.
Importance of Codes
Serving and Protecting the public:

Professionals stand in a fiduciary relationship with the public.
Code of ethics functions as a commitment by the profession as a whole
that engineers will serve the public health, safety and welfare.
Guidance:
45
Codes provide general guidance on the main obligation of engineers.
Inspiration:
Code expresses collective commitment to ethics
Positive motivation for ethical conduct
Shared standards:
Profession establishes explicit standards
Public is assured of a minimum standard of excellence on which it can
depend engineers.
Support for responsible professionals:

Positive support to professionals to act ethically
Can serve as legal support for engineers for professional obligations
Education and mutual understanding:

Widely circulated and officially approved by professional societies
Codes can be used in the classroom to discuss and reflect moral issue
Discipline:
Formal basis for investigating unethical conduct
Some professional societies do suspend or expel members whose
professional conduct has been proven unethical
Contributing to the professionals image

Codes can present a positive image to the public
Can help engineers more effectively serve the public where the image is
warranted
What a code of ethic is not?
Is not a recipe for ethical behavior; it is only a framework for arriving at good
ethical choice
Is never a substitute for sound judgment

46
Is not a legal document?????
Code of ethics doesnt create new moral or ethical principles. These principles
are well established in the society, and foundations of such go many centuries
back.
Code of Ethics of Engineers
Engineers have obligations to the public, their clients, employers and the
profession.
Many engineering societies have established codes of practice and codes of

ethics to guide members and inform the public at large.
Each engineering discipline and professional society maintains a code of ethics,

which the members pledge to uphold. Depending on their specializations,
engineers may also be governed by specific statute, whistle blowing, product
liability laws, and often the principles of business ethics.
Codes for Individuals
Individual codes of ethics are most commonly seen as part of the tenets of a
religion but can also be considered to be those unwritten rules of behavior
instilled in an individual by their upbringing and environment.
Society at large assumes that certain ethical behaviors are defined regardless of
religion, geographic location or nationality.
Examples of societal ethical behavior can include such things as:
Respect for anothers property
Refraining from violence against another
Treating others with civility

What is Profession?
47
Work that requires sophisticated skills, the use of judgment and the exercise of
discretion. Not routine and is not capable of being mechanized.
Membership in the profession requires extensive formal education, not simply

practical training
To set standards for admission to the profession, to set standards of conduct for
members and to enforce
Significant public good results from the practice of the profession (Martin and
Schinzinger 2000)
Aspects of Professional Societies
Sociologists opinion
Social-contract
Business Model
Lawyers
An excellent example of a code of ethics relating to a profession is the American

Bar Association Model Rules of Professional Conduct:
The first rule in the American Bar Association's Code of ethics addresses
attorney competence. Called Rule 1.1, this rule reads:
A lawyer shall provide competent representation to a client. Competent

representation requires the legal knowledge, skill, thoroughness and preparation
reasonably necessary for the representation.
This code of ethics provides guidance for lawyers on matters ranging from client
confidentiality to partnerships to treatment of witnesses inside and outside the
courtroom.
Also for paralegals
Physicians
48
The American Medical Association also imposes a Code of Ethics on physicians.

This code of ethics addresses everything from interpersonal relationships with
other staff members such as nurses, to information on patient care.
Different opinions within the AMA's code address different issues. For
instance, opinion 8.021:
Ethical obligations of medical directors, specifies that :(1) Placing the interests of
patients above other considerations, such as personal interests (eg, financial
incentives) or employer business interests (eg, profit). This entails applying the
plan parameters to each patient equally and engaging in neither discrimination
nor favoritism, is part of adherence to professional medical standards.
Engineering as a Profession
An engineer is a professional practitioner of engineering, concerned with

applying scientific knowledge, mathematics, and ingenuity to develop solutions
for technical problems.
Engineers design materials, structures, and systems while considering the

limitations imposed by practicality, regulation, safety, and cost. The
word engineer is derived from the Latin roots ingeniare ("to contrive, devise")
and ingenium ("cleverness").
Engineers are grounded in applied sciences, and their work in research and
development is distinct from the basic research focus of scientists.The work of
engineers forms the link between scientific discoveries and their subsequent
applications to human needs and quality of life
Engineering ethics
Engineering Ethics is the study of moral issues and decisions confronting

individuals and organizations engaged in engineering.
The Study of related questions about moral ideals, character, policies and
relationship of people and corporations involved in technological activity.
Teaching engineering ethics can achieve at least four desirable outcomes (Davis,
M ):
a) increased ethical sensitivity;
b) increased knowledge of relevant standards of conduct;

49
c) improved ethical judgment; and
d) improved ethical will-power (i.e., a greater ability to act ethically when

one wants to).
Ethical responsibility...involves more than leading a decent, honest, truthful life.

. . . And it involves something much more than making wise choices when such
choices suddenly, unexpectedly present themselves.
Our moral obligations must . . . include a willingness to engage others in the

difficult work of defining the crucial choices that confront technological society

Engineering education
Involve a concentration of study in an engineering specialty, e.g. both

mathematics and the physical and life sciences.
Many programs also include courses in general engineering and applied

accounting.
A design course, sometimes accompanied by a computer or laboratory class or

both, is part of the curriculum of most programs.
Often, general courses not directly related to engineering, such as those in the
social sciences or humanities, also are required.
Accreditation (evaluated by an external body to determine if applicable

standards are met).
The Washington Accord serves as an international accreditation agreement for

academic engineering degrees, recognizing the substantial equivalency in the
standards set by many major national engineering bodies.
In the United States, post-secondary degree programs in engineering are

accredited by the Accreditation Board for Engineering and Technology.
Regulation and licensure in engineering
In many countries, engineering tasks such as the design of bridges, electric

power plants, industrial equipment, machine design and chemical plants, must
be approved by a licensed professional engineer.
50
Most commonly titled Professional Engineer is a license to practice and is

indicated with the use of post-nominal letters; PE or P.Eng. These are common in
North America, European Engineer (Eur Ing) in Europe.
US- licensure is generally attainable through combination of education, preexamination (Fundamentals of Engineering exam), examination (Professional
Engineering Exam),]and engineering experience (typically in the area of 5+
years). Each state tests and licenses Professional Engineers.
Canada- the profession in each province is governed by its own engineering

association.
in the Province of British Columbia an engineering graduate with four or more

years of post graduate experience in an engineering-related field and passing
exams in ethics and law will need to be registered by the Association for
Professional Engineers and Geoscientists (APEGBC) in order to become a
Professional Engineer and be granted the professional designation of P.Eng
allowing one to practice engineering.
In Continental Europe, Latin America, Turkey and elsewhere the title is limited by
law to people with an engineering degree and the use of the title by others is
illegal.
Italy- the title is limited to people who both hold an engineering degree and have
passed a professional qualification examination (Esame di Stato).
Portugal- professional engineer titles and accredited engineering degrees are

regulated and certified by the Ordem dos Engenheiros.
Czech Republic- the title "engineer" (Ing.) is given to people with a (masters)
degree in chemistry, technology or economics for historical and traditional
reasons.
In Greece, the academic title of "Diploma Engineer" is awarded after completion

of the five-year engineering study course and the title of "Certified Engineer" is
awarded after completion of the four-year course of engineering studies at a
Technological Educational Institute (TEI).
The practice of engineering in the UK is not a regulated profession but the

control of the titles of Chartered Engineer (CEng) and Incorporated Engineer
(IEng) is regulated.
These titles are protected by law and are subject to strict requirements defined
by the Engineering Council UK. The title CEng is in use in much of
the Commonwealth.
51
Many semi skilled trades and engineering technicians in the UK also call
themselves engineers. This is seen by some as a misuse of the title, giving a
false image of the profession.
A growing movement in the UK is to legally protect the title 'Engineer' so that

only professional engineers can use it; a Direct Gov petition has been started to
further this cause.
Whistle-blowing
If workers bring information about a wrongdoing to the attention of their

employers or a relevant organisation, they are protected in certain
circumstances under the Public Interest Disclosure Act 1998 (USA).
This is commonly referred to as 'blowing the whistle'. The law that protects
whistle-blowers is for the public interest so people are encouraged to speak out
if they find malpractice in an organisation. Blowing the whistle is more formally
known as 'making a disclosure in the public interest.
Qualifying disclosures are disclosures of information where the worker

reasonably believes one or more of the following matters is either happening,
has taken place, or is likely to happen in the future:
A criminal offence
The breach of a legal obligation
A miscarriage of justice
A danger to the health and safety of any individual
Damage to the environment
Deliberate attempt to conceal any of the above.
A whistleblower (whistle-blower or whistle blower) is a person who tells the

public or someone in authority about alleged dishonest or illegal activities
(misconduct) occurring in a government department or private company or
organization.
The alleged misconduct may be classified in many ways; for example, a violation
of a law, rule, regulation and/or a direct threat to public interest, such as fraud,
health/safety violations, and corruption.
52
Whistleblowers may make their allegations internally (for example, to other

people within the accused organization) or externally (to regulators, law
enforcement agencies, to the media or to groups concerned with the issues).
One of the first laws that protected whistleblowers was the 1863 United
States False Claims Act (revised in 1986), which tried to combat fraud by
suppliers of the United States government during the Civil War. The act
encourages whistleblowers by promising them a percentage of the money
recovered or damages won by the government and protects them from wrongful
dismissal.
Whistleblowers frequently face reprisal, sometimes at the hands of the

organization or group which they have accused, sometimes from related
organizations, and sometimes under law.
Questions about the legitimacy of whistle blowing, the moral responsibility of

whistle blowing, and the appraisal of the institutions of whistle blowing are part
of the field of political ethics.
53
54
10 Tips for Boosting Employee Morale
Recognize special events in the lives of your employees.
2. Keep the conversation going.
3. Recognize and reward your employees for doing good work.
4. Make the workplace comfortable.
5. Smile more.
6. Build a culture of trust.
7. Encourage work breaks.
8. Employee people "engines.
9. Build a culture of employee appreciation.
10. Have fun.
Assignment -1
Whistle Blowing

Regulation and licensure in engineering in Nepal
American, UK or other European system???
4 yrs study after higher secondary or certificate level.
No Professional Examination, but registration in Engineering Council
Many Engineering Colleges are having poor physical and academic environment
24 Gha Provision
55
Other Ethical Issues
Relationships with clients, consultants, competitors, and contractors
Ensuring legal compliance by clients, client's contractors, and others
Conflict of interest
Bribery and kickback, which also may include: Gifts, meals, services, and
entertainment
Treatment of confidential or proprietary information
Consideration of the employers assets
Outside employment/activities (Moonlighting)
Some engineering societies are addressing environmental protection as a standalone question of ethics.
The field of business ethics often overlaps and informs ethical decision making
for engineers.
Licensure Model and

Code of Ethics
Engineering Licensure Model National Society of Professional Engineers(NSPE)
Step 1: Become an Engineer Intern
Step 2: Gain professional experience
Step 3: Prepare for and take the PE exam
Engineering Licensure Model (NSPE)
Step 1: Become an Engineer Intern (the first step toward full PE licensure)
56
Graduate from an engineering program approved by your state's licensure

board
Successful in completing the Fundamentals of Engineering (FE) exam
Step 2: Gain professional experience

All states require that candidates complete four years of qualifying
engineering experience, typically under the supervision of a professional
engineer.
Step 3: Prepare for and take the PE exam

the final step in attaining licensure is successfully completing the
Principles and Practice of Engineering (PE) exam.
Continue professional Competency
ASME requires ethical practice by each of its members and has adopted the
following Code of Ethics of Engineers as referenced in the ASME Constitution,
Article C2.1.1.
The Fundamental Principles
Engineers uphold and advance the integrity, honor and dignity of the
engineering profession by:
Using their knowledge and skill for the enhancement of human welfare;
57
Being honest and impartial, and serving with fidelity the public, their employers
and clients; and
Striving to increase the competence and prestige of the engineering profession.
Engineers shall hold paramount the safety, health and welfare of the public in
the performance of their professional duties.
Engineers shall perform services only in the areas of their competence.
Engineers shall continue their professional development throughout their careers

and shall provide opportunities for the professional and ethical development of
those engineers under their supervision.
Engineers shall act in professional matters for each employer or client as faithful
agents or trustees, and shall avoid conflicts of interest or the appearance of
conflicts of interest.
Engineers shall build their professional reputation on the merit of their services
and shall not compete unfairly with others.
Engineers shall associate only with reputable persons or organizations.
Engineers shall issue public statements only in an objective and truthful manner.
Engineers shall consider environmental impact in the performance of their

professional duties.
Code of Ethics of
Engineers :
The Fundamental Canons
Nepal Engineering Council

Professional Code of Conduct
1. Discipline and Honesty :
The Engineering service/profession must be conducted in a disciplined
manner with honesty, not contravening professional dignity and well-being
2,. Politeness and Confidentiality:
Engineering services for customers should be dealt with in a polite manner
and professional information should remain confidential except with written or
verbal consent of the customers concerned. This, however, is not deemed to be
58
a restriction to provide such information to the concerned authority as per the

existing laws.
3. Non-discrimination :
No discrimination should be made against customers on the grounds of
religion, race, sex, caste or any other things while applying professional
knowledge and skills.
4. Professional Work:
Individuals should only do professional work in their field or provide
recommendations or suggestions only within the area of their subject of study or
obtained knowledge or skills. With regard to the works not falling within the
subject of one's profession, such works should be recommended to be done by
an expert of that subject matter.
5. Deeds which may cause harm to the engineering profession :
With the exception of salary, allowance and benefits to be received for
services provided, one shall not obtain improper financial gain of any kind or
conduct improper activities of any kind, which would impair the engineering
profession.
6. Personal responsibility:
All individuals will be personally responsible for all works performed in
connection with his/her engineering profession.
7. State name, designation and registration no:
While signing the documents or descriptions such as the design, map,
specifications and estimates etc, relating to the engineering profession, the
details should include, the name, designation and NEC registration No. and
should be stated in a clear and comprehensible manner.
8. No publicity or advertisement must be made which may cause
unnecessary effect:
In connection with the professional activities to be carried out, no publicity
or advertisement shall be made so as to cause unnecessary effect upon the
customers.
59
Assignment-1
What is Engineering Profession?

What is the current Situation of
Engineering Profession in Nepal?
Suggest the ways to make this
better in future.
4. Law and Contract
What is law?
The whole system or set of rules made by the government of a town, state,
country, etc.
60
The system of rules which a particular country or community recognizes as

regulating the actions of its members and which it may enforce by the
imposition of penalties.
"The rule of law is better than the rule of any individual. - The Greek
philosopher Aristotle (in 350 BC)
John Austin (English jurist born 1790)

"A rule laid down for the guidance of an intelligent being by an intelligent
being having power over him.
"A body of rules fixed and enforced by a sovereign political authority.
Max Weber (German Sociologist born 1954)

"Lawexist if it is externally guaranteed by the probability of coercion
(physical or psychological) to bring about conformity or avenge violation,
and is applied by a staff of people holding themselves specially ready for
that purpose.
Thomas Hobbes (English philosopher born 1588)

"Law is the formal glue that holds fundamentally disorganized societies
together."
Marxist theory
a tool of oppression (Burden, Impose) used by capitalists to control the
proletariat (Workers, Laborers).
Definition of law
Law is a term which does not have a universally accepted definition, but one
definition is that law is a system of rules and guidelines which are enforced
through social institutions to govern behavior.
Laws can be made by legislatures through legislation (resulting in statutes), the

executive through decrees and regulations, or judges through binding
precedents (normally in common law jurisdictions).
61
Private individuals can create legally binding contracts, including (in some
jurisdictions) arbitration agreements that exclude the normal court process.
The formation of laws themselves may be influenced by a constitution (written

or unwritten) and the rights encoded therein.
Law may be defined as
the system of rules which a particular country or community recognizes as

regulating the actions of its members and which it may enforce by the
imposition of penalties.
a system of rules, usually enforced through a set of institutions. It shapes

politics, economics and society in numerous ways and serves as a primary
social mediator of relations between people.
Principles of Law
As part of the law, general principles of law do not represent binding normative
circumstances in the way that explicit legal norms do, but can be seen as rules
of law which should be followed as far as possible.
Since they do not carry such rigid binding force as norms of the legal order
proper, these principles are called "optimization precepts". For example, the
principle deriving from Roman law which holds that agreements are to be kept
(pacta sunt servanda) is a general judicial starting-point to which there are many
exceptions.
Hence it is possible to be released from excessively harsh and inequitable

contractual obligations on the basis of, inter alia, the principle of
reasonableness.
Principle - a rule or standard especially of good behavior; "a man of principle";

"he will not violate his principles"
Jus sanguinis - the principle that a person's nationality at birth is the same as
that of his natural parents
Jus soli - the principle that a person's nationality at birth is determined by the
place of birth
Pre-emption, preemption - the judicial principle asserting the supremacy of

federal over state legislation on the same subject
Relation back, relation - (law) the principle that an act done at a later time is
deemed by law to have occurred at an earlier time; "his attorney argued for the
62
relation back of the amended complaint to the time the initial complaint was
filed"
Law, jurisprudence - the collection of rules imposed by authority; "civilization

presupposes respect for the law"; "the great problem for jurisprudence to allow
freedom while enforcing order"
The Solicitor's Regulation Authority's (SRA) Handbook outlines ten mandatory

principles which apply to everyone that the SRA regulates and to all aspects of
practice.
1. uphold the rule of law and the proper administration of justice

2. act with integrity
3. not allow your independence to be compromised
4. act in the best interests of each client
5. provide a proper standard of service to your clients
6. behave in a way that maintains the trust the public places in you and in the
provision of legal services
7. comply with your legal and regulatory obligations and deal with your regulators
and ombudsman in an open, timely and co-operative manner
8. run your business or carry out your role in the business effectively and in
accordance with proper governance and sound financial and risk management
principles
9. run your business or carry out your role in the business in a way that encourages
equality of opportunity and respect for diversity
10.
protect client money and assets
It may be the case that two or more of these principles come into conflict. If this
is occurs then the principle that takes precedence is the one which best serves
the public interest in the particular circumstance, especially the public interest in
the proper administration of justice.
Scope of Law
The law shapes politics, economics, and society in various ways and serves as a
social mediator of relations between people.
63
Law provides a rich source of scholarly inquiry, into

legal history,
philosophy,
economic analysis or sociology.
Law also raises important and complex issues concerning equality, fairness and
justice
In a typical democracy, the central institutions for interpreting and creating law
are the three main branches of government,
impartial judiciary,
democratic legislature, and
Scope of law in
Engineering Activities
accountable executive.
Constitutional law
provides a framework for the creation of law, the protection of human

rights.
Contract law
regulates everything from buying a bus ticket to trading on derivatives
markets.
Tort law
allows claims for compensation if a person's rights or property are harmed.
If the harm is criminalized in a statute, criminal law offers means by which
the state can prosecute the perpetrator.
Administrative law
is used to review the decisions of government agencies
international law governs affairs between sovereign nation states in activities

ranging from trade to environmental regulation or military action.
Corporate law
Environmental law
64
International law etc etc
Sources of Law
Precedents
Customs
Legislation
Statutory interpretation
Preparatory works
Precedents
Customs
A custom is a rule which in a particular family or in a particular district or

in a particular section, classes or tribes, has from long usage obtained the
force of law. The dictionary of English law defines custom as a law not
written, which being established by long use and consent of our ancestors
has been and daily is put into practice. Custom as a source of law got
recognition since the emergence of sovereignty on the horizon of
jurisprudence.
Legislation
The judgments passed by some of the learned jurists became another

significant source of law. When there is no legislature on particular point
which arises in changing conditions, the judges depend on their own sense
of right and wrong and decide the disputes. Such decisions become
authority or guide for subsequent cases of a similar nature and they are
called precedents.
that source of law which consists in the declaration of legal rules by a

competent authority. Legislature is the direct source of law. Legislature
frames new laws, amends the old laws and cancels existing laws in all
countries. In modern times this is the most important source of law
making. The term legislature means any form of law making.
Statutory interpretation
65
Statutory interpretation is the process by which courts interpret and

apply legislation. Some amount of interpretation is often necessary when a
case involves a statute. Sometimes the words of a statute have a plain and
straightforward meaning.
It is a very important function of the court, the process of ascertaining the

meaning of letters and expressions by the court is either interpretation or
construction. Interpretation is the process of which the court seeks to
ascertain the Meaning of a particular legislature. It is through
interpretation, the judiciary evolves the law and brings the changes in it
and thus keeps the law abreast of law
Preparatory works
In some legal cultures some of the documents produced in the process

leading up to legislation are subsequently used as guidelines on how to
interpret and understand an act of legislation.
Contract: Definition
(v.) To make an agreement; to covenant; to agree; to bargain;
(n.) To enter into, with mutual obligations; to make a bargain or
covenant for.
(a.) Contracted; affianced; betrothed.
A contract intends to formalize an agreement between two or more

parties, in relation to a particular subject
"A contract is a promise or a set of promises for the breach of which

the law recognizes duty". This amounts to saying that a contract is a
legally enforceable promise (Jackson 1973).
A contract is a legally binding agreement. It is a bargain and each side,

or party to the contract, must contribute something to it for it to be
valid (Gahlot et al, 1996)
A Contract is an agreement concluded between two or more parties

for performing or not performing any act which could be executed
according to law. (Nepal Contract Act,1999, Section-2)
The simplest definition of a contract is that it is a promise enforceable at law.

The promise may be to do something or not to do something. By extension, the
66
term "contract" has also come to refer to the written document in which terms of
the promise are written down.
In a commercial sense, a contract is a mutual agreement enforceable at law

between two or more parties that something shall be done or not done by either
or both parties. By implication, both parties thereby accept certain
responsibilities and in return receive certain benefits.
A contract is an agreement, based on consensus between legal subjects with

contractual capacity, which is legal, physically possible and complies with the
prescribed formalities and which is reached with the intention of creating a legal
obligation with resultant rights and duties.
Law of Obligation:
A legal obligation is a legal tie between legal subjects, recognised

by law, which is created as a result of a certain legal fact and
which creates rights and duties that are recognised by law.
A legal obligation consists of two elements
the Right of the Creditor to claim performance and
the Duty of the Debtor to perform accordingly.
The creditors right is known as a personal right, which corresponds to

the legal object of performance (i.e. a specific action or inaction,
delivery of a specific thing or payment of a specific amount of money).
Sources of obligations: Legal obligations arise out of legal facts, which can be
categorised as follows:
Events without human intervention:- Forces of nature, animal behaviour,

lapse of time, etc.
Human conduct:
Non-juristic acts:- Acts to which the law gives effect irrespective of the
intentions of the parties (e.g. delicts).
Juristic acts:- Acts to which the law gives effect according to the
intentions of the party or parties.
Unilateral juristic acts:- Acts conducted individually by single parties

(e.g. wills).
67
Multilateral juristic acts:- Acts conducted collectively by two or more

co-operating parties (e.g. contracts).
The most important sources of obligations are acts of contract, delict and unjust
enrichment. Hence, a contract is not a legal obligation in itself but
rather a legal fact that gives rise to a legal obligation.
The law of contract is the body of legal rules governing the conclusion
and consequences of contracts.
It defines the basis and requirements of contractual liability, as well as

the rights and duties of the parties. Moreover, it regulates the breach
of contract and provides remedies for such breach. Finally, it governs
the termination of contractual obligations.
These rules, along with the law of delict and law of enrichment, fall
under the law of obligations, which is a category of the law of
patrimony, forming part of private law, which is fundamentally
concerned with defining, protecting and balancing legitimate individual
interests.
The law of contract is the body of legal rules governing the conclusion
and consequences of contracts.
It defines the basis and requirements of contractual liability, as well as

the rights and duties of the parties. Moreover, it regulates the breach
of contract and provides remedies for such breach. Finally, it governs
the termination of contractual obligations.
These rules, along with the law of delict and law of enrichment, fall
under the law of obligations, which is a category of the law of
patrimony, forming part of private law, which is fundamentally
concerned with defining, protecting and balancing legitimate individual
interests.
Essential Elements of a
Valid Contract
Agreement (Offer and Acceptance):
when an offer capable of immediate acceptance is met with a "mirror image"

acceptance (i.e., an unqualified acceptance).
Consideration:
the parties to a contract must exchange something of value.
68
Capacity to contract:
A person is competent to contract if, at the time of making, he is of sound
mind, major and not disqualified from contracting under law
Legal purpose:
The contract must be legal and may not contradict any statutory or common
law rule.
Legality of form:
The contract must abide by any formalities set by law or by the parties
themselves.
Intention to create legal relations:

parties intended to make legally enforceable contract
Consent to contract:
the parties to the contract have a mutual understanding of what the contract
covers
Vitiating factors: Misstates, Undue influence, Misrepresentation,
Duress
Different Kinds of
Contract:
Void, Voidable and Unenforceable contracts (defective contracts)
Bilateral contracts and Unilateral contracts

(Sales contract, Rewards)
Executed Contract and Executory Contract

(both the parties have performed their obligation, both the parties
have yet to perform their promises)
Express Contract and Implied Contract:

by
(the terms of a contract are reduced in writing or are agreed upon

spoken words at the time of its formation, proposal or acceptance of
any promise is made otherwise than in words)
69
Quasi-Contract and Contingent Contract

(Certain obligations which are not contracts in fact but are so in the
contemplation of law, a promise is conditional and the contract shall be
performed only on the happening of some future uncertain event)
Engineering/
Construction Contract
Construction is a services activity with business side as one of its dimension
The construction industry is almost unique amongst commercial endeavors

where the "Project is sold before it is made"
The facility is purchased before it is "manufactured" based on a set of drawings

and work descriptors.
Project delivery systems have been developed to provide the construction buyer
(i.e., the client) with a single point of contact or source of purchase.
An engineering contract is a mutual agreement negotiated between two (or

more) parties for the purpose of undertaking, on a commercial basis, certain
clearly specified engineering work.
Depending upon the magnitude and nature of the work, its special
design needs, funding requirements, complexities of the job and
owner's own preference, different types of contracts are entered into.
Contracts for any particular engineering project can be classified in the

first instance as either Main Contract (sometimes referred to as Head
Contracts) or Subcontracts.
The essential difference is that a Main Contract is directly between the

Principle and Main Contractor, where as a Subcontract is between a
Main contractor and another contractor referred to as a Subcontractor.
Engineering contracts, whether Main Contracts or Subcontracts, can

further be classified in a number or ways, each of which depends upon
a particular characteristic or feature.
The three most commonly used characteristics for this purpose are:
1. The method by which payment for the work under the contract is evaluated.
70
2. The method by which the contractor is selected.

3. The method by which the responsibility for the technical and
administrative aspects of the work is allocated.
There are number of options under each of these headings, which
can apply to any contract, and the contract can be defined by selecting
the appropriate option from each. Each has its advantages and
disadvantages for a particular application, and each has developed a
certain degree of flexibility so that, in reality, many of the individual
alternatives overlap one project's contractual agreement precisely.
1. Classifications by the method of payment.
Lump sum or fixed price contracts

contractor is paid the amount nominated in the contract for the work as
agreed with the principal when negotiating the contract
Schedule of rates or unit-price contracts

The total price is completed by multiplying the unit price by guided
quantity and summing up the cost of whole the items
Cost plus contracts

actual costs incurred in carrying out the work under the contract plus a
fixed or variable fee to cover overhead costs and profit.
cost + percent of cost
cost + fixed fee
cost + fixed fee + Profit sharing
cost + sliding fee
Sometimes, Part Lump sum and part Unit-Price Contract is also adopted
in a single project as a fourth type
Advantages and Disadvantages of all types
2. Classifications by the method of selecting the Contractor
Competitively Tendered Contracts

the award of contract is generally made to the lowest responsible bidder
and an agreement is reached between the Principle and the Contractor
71
Single Fixed Price or Lump Sum Contracts and Unit Price Contracts
Negotiated Contracts with the selected contractors

the principal negotiates directly with a contractor to arrive at a mutually
satisfactory agreement to undertake the work.
fixed-price, unit-rate and cost plus fee can be adopted
Selective Competition
Competition among few selected contractors
3.Classifications by Technical and Administrative Responsibility
Engineering contracts can be classified by the manner in which project
implementation responsibilities are allocated. There are a number of
classifications under this method, the principal ones being;
Traditional Approached Contract
Design-Build or Design-Manage (Turn Key)
Build-Own-Operate Transfer (BOOT)
Management Contracts
Traditional Approach
The owner employs a designer who first prepares the plans and
specifications, then exercise some degree of inspection, monitoring or
control during construction.
Construction itself is the responsibility of single general contractor

under contract to the owner
72

Employer
Consulta
nt
Construction
Consultancy contract
Contract
contract
or
employer prepares the employers documents,
transfer the majority of the risk onto the contractor,
employer needs to enter into one contract that is with the contractor, who in
turn appoints their own design consultants
Build-Own-Operate Transfer (BOOT)

"A project based on the granting of a concession by a principle, usually
a government to a promoter, sometimes known as the concessionaire,
who is responsible for the construction, financing, operation and
maintenance of a facility over the period of the concession, before
finally transferring the facility, at no cost to the principal, as a fully
operational facility, (Smith and Merna, 1992)
Similar contractual relations as in Turnkey con
BOOT projects are contractor financed turnkey co
Management Contracts
73

Consultancy
contract
Consultant
s
Employer
Managing
contract
Management
Contractor
Construction
Construction
contract
Contractors
one form is retained to coordinate all activities from concept design

through acceptance of the facility.
the firm represents the owner in all construction management

activities.
The allocation of risks depends on the types of contract where risks
would shift from client to contractor and vice versa
Sub-Contracting
74
Subcontracts are widely

construction industry.
used
in
In principle there is no legal difference

between a subcontract and a main
contract.
Formation of Contract
Almost everyone makes contracts every day
Sometimes written contracts are required, e.g., when buying a house.

However the vast majority of contracts can be and are made orally, like
buying a book, or a coffee at a shop.
A verbal exchange of promises may be binding and be as legally valid

as a written contract. An unwritten, unspoken contract, also known as
"a contract implied by the acts of the parties", which can be either
implied in fact or implied in law, may also be legally binding.
The most important feature of a contract is that one party makes an

offer for an arrangement that another accepts. This can be called a
concurrence of wills or ad idem (meeting of the minds) of two or more
parties.
Formation of Contract:
Mutual Consent (Meeting of
Mind)
Consent in contract means: to agree in opinion or sentiment; to be of

the same mind.
The parties to the contract have a mutual understanding of what the

contract covers, e.g.
75
- in a contract for the sale of a "mustang", the buyer thinks he will obtain a
car and the seller believes he is contracting to sell a horse, there is no meeting
of the minds and the contract will likely be held unenforceable.
When two parties mutually agree to a transaction, a contract is formed.
The mutual agreement must apply to all significant or material

aspect of the agreement.
The expressed written terms of contract will govern the relationship

regardless of any misunderstanding on the part of any parties.
3. Formation of
Contract:
Essential Elements-
Typically, in order to be
enforceable, a contract
must involve the
following elements:
Offer
Acceptance is simply some indication by the person receiving the offer

that the offer is accepted. The acceptance must be clear and absolute
and without conditions attached. The objective bystander must be able
to determine that the offer has been accepted
acceptance relates to the idea of where an offer is made by one party

that is considered to be acceptable to another without qualification in
words or through conduct to the offeror in conformation with the
indicated or prescribe terms of the offer that has been made
An acceptance can be made orally or in writing. Mere silence will not

create an acceptance. The acceptor has a right to withdraw his
acceptance before it comes to the knowledge of the offeror. The
effective acceptance must be communicated.
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Acceptance
The acceptance must be made before the offer has expired. Most offers
contain a time limit within which the offer can be accepted. Once the
offer has expired, it can not be accepted unless the person making the
offer has renewed it.
No conditions can be attached to the acceptance and the terms of the

offer can not be changed. If conditions are attached or terms are
changed, the parties are merely negotiating and may ultimately reach
agreement on the terms of the contract
The offer must be accepted before it is withdrawn. An offer can be

withdrawn before acceptance unless one of the terms of the offer is
that it will remain open for acceptance until a specified time
Consideration
Consideration is known as 'the price of a promise' and is a requirement

for contracts under common law.
The idea behind consideration is that both parties to a contract must

bring something to the bargain. This means that each side must
promise to give or to do something for the other.
The element of exchange is known as Consideration and is an

essential element of every valid contract.
A party seeking to enforce a contract must show that it conferred some

benefit or suffered some that is recognized by law.
Consideration is some benefit or advantage to the person making the

offer and a corresponding cost or prejudice to the person accepting the
offer.
Money is often recognized as consideration, but in some cases money

will not suffice as consideration (for example, when one party agrees to
make partial payment of a debt in exchange for being released from
the full amount).
Some common-law and Civil law systems do not require consideration,

and some commentators consider it unnecessarythe requirement of
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intent by both parties to create legal relations by both parties performs

the same function under contract.
The law only requires that there be sufficient consideration; something

of value must be given. The consideration can not be something given
or promised in the past. To be valid, the consideration must be a new
promise or some fresh benefit exchanged for the offer.
In general then, as long as the basic elements of an offer and

acceptance with consideration are present, the parties have a valid and
binding contract. There is no requirement that the contract be in
writing except in certain special situations
Rules Governing
Consideration
Consideration must be "sufficient" (i.e., recognizable by the law), but need

not be "adequate" (i.e., need not be a fair and reasonable exchange for the
benefit of the promise).
Consideration must not be from the past.
Consideration must move from the promisee.
The promise to do something one is already contractually obliged to do is

not, regarded as good consideration,
The promise must not be to do something one is already obliged by the

general law to do - e.g., to give refrain from crime or to give evidence in court
A number of commentators have suggested that consideration be abandoned,

and estoppel be used to replace it as a basis for contracts
Estoppel is an equitable doctrine that provides for the creation of legal

obligations if a party has given another an assurance
Online Contracts
Online contracts, which are easily made, are usually valid on a smaller
scale for a period of one to three months, while on a larger scale can
last about five years.
As with all things legal, especially in regards to the ever-evolving

internet, general rules like length of validity have many exceptions.
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All cases are evaluated on their own merits, and those merits are
defined by the facts presented in each instance.
It is up to the owner of the site to do what it can to guarantee

enforceability of its contracts.
Though 90% of people sign online contracts before reading the content,
E-signature laws have made the electronic contract and signature as
legally valid as a paper contract.
It has been estimated that roughly one hundred and ten electronic
contracts are signed every second.
Unilateral Contracts
In a unilateral contract, only one party to

the contract makes a promise.
A typical example is the reward contract:
A promises to pay a reward to B if B finds A's dog. B is not obliged to

find A's dog, but A is obliged to pay the reward to B if B finds the dog
Condition precedents can also be attached to unilateral contracts

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An offer of a unilateral contract may often be made to many people (or

'to the world') by means of an advertisement
In that situation, acceptance will only occur on satisfaction of the

condition
If the condition is something that only one party can perform, both the
offeror and offeree are protected
unilateral contracts, the requirement that acceptance be

communicated to the offeror is waived. The offeree accepts by
performing the condition
Implied Contract
Offer and acceptance does not always need to be expressed orally or in

writing. An implied contract is one in which some of the terms are not
expressed in words. This can take two forms. A contract which is
implied in fact is one in which the circumstances imply that parties
have reached an agreement even though they have not done so
expressly. For example, by going to a doctor for a checkup, a patient
agrees that he will pay a fair price for the service. If one refuses to pay
after being examined, the patient has breached a contract implied in
fact.
A contract which is implied in law is also called a quasi-contract,

because it is not in fact a contract; rather, it is a means for the courts
to remedy situations in which one party would be unjustly enriched
were he or she not required to compensate the other.
Defective Contracts
Void contract:
One of the requirements for a valid contract is absent - no
contract is concluded.
Voidable contract:
A contract is indeed concluded but it can be set aside on account
of a defect that existed at the time of conclusion (e.g. consensus
improperly obtained).
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Unenforceable contract:
A contract is indeed concluded but it creates only a natural
obligation, which is recognized but not enforced by law (e.g. a wager).
Contract Practices in
Nepal
Modern Approaches of Contract Management like Professional Construction

Management Approach are still to be flourished in Nepali Contract Environment.
Mostly Traditional Approach especially in Public Sector-Negotiated contract is

limited up to only Rs. 1.5 lakhs
In private sectors, other modalities like lump sum contracts cost plus contracts
are also in use.
Turnkey and BOOT Contracts are also in Practice these days- limited number of
power projects
It is vital to involve the private sector for the construction of Public

Infrastructures- Kathmandu-Terai Express way
Public Infrastructure Build Operate and Transfer Policy, 2000
Performance of a contract (when the parties do what they agreed to

do) discharges it.
Discharging a contract terminates it.
Discharge usually results from performance. Most contracts are

discharged by the parties doing what they promised to do.
But some times discharge can occur in other ways:
Performance and
Discharge of Contracts
1. the occurrence or failure of a condition on which a contract is

based,
2. agreement of the parties,
3. operation of law, and
4. breach of the contract
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Performance of Contract:
Definition
Execution of a contract by which the contracting parties are

automatically discharged of their obligations under it.
Although contracts usually call for full and precise performance, a
substantial performance may be acceptable under certain
circumstances, on a pro-rata basis, or on payment of damages for the
unfinished or defective performance.
Discharge/ Termination of
Contract:
The act of making a contract or agreement null.
A contract becomes discharged once both parties have fully performed

their contractual obligations.
If one party does not fully perform the contract this will amount to
breach and the other party may have a claim for damages unless the
contract has been frustrated.
If the non performance amounts to a repudiator breach (breach of

condition) the other party will be released from their obligations.
by Performance
DISCHARGE BY PERFORMANCE
Most contracts are discharged by the parties doing what they promised to do.
TENDER OF PERFORMANCE
Discharge can be accomplished by tender (an unconditional offer to perform by
one who is ready, willing, and able to do so). If performance has been tendered
and the other party refuses to perform, the party making the tender can sue for
breach
Complete versus Substantial Performance
a. Complete Performance: Express conditions fully occur in all aspects.
b. Substantial Performance: Performance that does not vary greatly from the
performance promised in the contract.
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2. Performance to the Satisfaction of Another

a. Personal Satisfaction of One of the Parties
When the subject matter of the contract is personal, performance must actually
satisfy the party (a condition precedent).
b. Satisfaction of a Reasonable Person
Contracts involving mechanical fitness, utility, or marketability need only be
performed to the satisfaction of a reasonable person.
c. Satisfaction of a Third Party
When the satisfaction of a third party is required, most courts require the work
to be satisfactory to a reasonable person
by the occurrence or failure of
condition
Aa
condition
is a possible future event, occurrence or nonoccurrence of which
triggers performance of an obligation or terminates an obligation. If performance
is contingent on a condition that is not satisfied, neither party has to perform.
1. CONDITION PRECEDENT
A condition that must be fulfilled before a partys performance can be required.
2. CONDITION SUBSEQUENT
A condition that operates to terminate an obligation to perform. The condition
follows a duty to perform. Such conditions are rare.
3. CONCURRENT CONDITION
When each partys duty to perform is conditioned on the other partys duty to
perform.
4. EXPRESS AND IMPLIED CONDITIONS
1. Express Condition: provided for by the parties agreement. Usually
prefaced by the word if, provided, after, or when.
2. Implied-in-Fact Condition: Understood to be part of the agreement
but not found in the express language of the agreement.
A condition is a possible future event, occurrence or nonoccurrence of which
triggers performance of an obligation or terminates an obligation. If performance
is contingent on a condition that is not satisfied, neither party has to perform.
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1. CONDITION PRECEDENT
A condition that must be fulfilled before a partys performance can be required.
2. CONDITION SUBSEQUENT
A condition that operates to terminate an obligation to perform. The condition
follows a duty to perform. Such conditions are rare.
3. CONCURRENT CONDITION
When each partys duty to perform is conditioned on the other partys duty to
perform.
4. EXPRESS AND IMPLIED CONDITIONS
1. Express Condition: provided for by the parties agreement. Usually
prefaced by the word if, provided, after, or when.
2. Implied-in-Fact Condition: Understood to be part of the agreement
but not found in the express language of the agreement.
by the Agreement of the parties

A. DISCHARGE BY RESCISSION
Rescission is the process by which a contract is canceled and the parties are
returned to the positions they occupied prior to forming it.
B. DISCHARGE BY SUBSTITUTED AGREEMENT
1. Novation
2. Compromise, or Settlement Agreement
C. DISCHARGE BY ACCORD AND SATISFACTION
1. Accord
2. Satisfaction
3. If the Obligor Refuses to Perform
by the Operation of Law
A. ALTERATION OF THE CONTRACT

An innocent party can treat a contract as discharged if the other party materially
alters a term (such as quantity or price) without consent.
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B. STATUTES OF LIMITATIONS
Statutes of limitations limit the period during which a party can sue based on a
breach of contract.
C. BANKRUPTCY
A discharge in bankruptcy will ordinarily bar enforcement of most of a debtors
contracts.
D. DISCHARGE BY IMPOSSIBILITY OR IMPRACTICABILITY OF
PERFORMANCE
1. Objective Impossibility of Performance
2. Commercial Impracticability
3. Frustration of Purpose
4.Temporary Impossibility
by the Breach of Contract
Breach of contract: A failure to honor ones obligation under a contract.
Breach of contract is a legal cause of action in which a binding agreement or

bargained-for exchange is not honored by one or more of the parties to the
contract by non-performance or interference with the other party's performance.
If the party does not fulfill his contractual promise, or has given information to
the other party that he will not perform his duty as mentioned in the contract or
if by his action and conduct he seems to be unable to perform the contract, he is
said to breach the contract.
Material Versus Immaterial Breach
Fundamental breach
Anticipatory breach
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Types of Breach of
Contracts
Immaterial breaches
A minor breach, a partial breach or an immaterial breach, occurs when the nonbreaching party is un entitled to an order for performance of its obligations, but
only to collect the actual amount of their damages.
Material breach
A material breach is any failure to perform that permits the other party to the
contract to either compel performance, or collect damages because of the
breach
Fundamental breach
A fundamental breach (or repudiatory breach) is a breach so fundamental that it

permits the aggrieved party to terminate performance of the contract, in
addition to entitling that party to sue for damages.
Anticipatory breach
A breach by anticipatory repudiation (or simply anticipatory breach) is an
unequivocal indication that the party will not perform when performance is due,
or a situation in which future non-performance is inevitable.
Remedies for Breach of

Contract
A non-breaching party has three basic choices when faced with a breach of
contract1. Excuse the Breach,
2. Rescind the Contract, or
3. Terminate the contract
Excuse the Breach: risk of having waived the particular contract requirement.
Rescission: the contract is canceled and both sides are excused from further
performance and any money advanced is returned, trap for non breaching party
which looses the right to sue for damages under contract
Termination: common remedy for non-breaching party.
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Termination of a Contract
Termination is the contractually established right to end the contractual

relationship under certain specified circumstances
In an effort to impose some order and predictability on the breach of contract

issue, most construction contracts contain a termination clause which typically
defines-
Those short comings of the employer which would justify the contractors work
stoppage,
The employer be given written notice of the alleged breach and a certain period
of time to cure the breach,
Employers right to terminate the contract (Owners termination of a contractor

for default and termination for convenience)
Damages for Breach of

Contract
The general rule for compensation for breach of contract is to put the
plaintiff in the same position he or she would have been in had the
contract been performed as agreed. In other words, in any breach of
contract lawsuit, the court will try to fashion a remedy that makes the
plaintiff "whole."
Compensation for breach of contract may include compensatory

damages, consequential (also called special) damages, liquidated
damages, specific performance and nominal damages.
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Compensatory Damages
Award of money intended to compensate a non-breaching party for the

loss of the bargain.
They place the non-breaching party in the same position as if the

contract had been fully performed by restoring the benefit of the
bargain.
The amount of that will be awarded for breach of contract depends on:
The type of contract involved (Sale of Goods, Construction
Contracts, Employment contracts)
Which party breached the contract.
Liquidated Damages
Damages to which parties to a contract agree in advance if the contract

is breached.
To be lawful,
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The actual damages must be difficult or impracticable to

determine, and
The liquidated amount must be reasonable in the circumstances.
Many businesses include liquidated damages in their commercial

contracts, which help to:
Provide certainty,
Avoid lawsuits, and
Provide an incentive to enter into contracts
Consequential Damages
Foreseeable damages that arise from circumstances outside the contract.
Consequential damages may include the value of lost profit or revenue,

but only if such loss was caused by the breach of contract and was
foreseeable at the time the contract was entered into
To be liable for these damages,

The breaching party must know or have reason to know that the breach
will cause special damages to the other party.
Nominal Damages
Damages awarded when the non-breaching party sues the breaching party even
though no financial loss has resulted from the breach.
Usually awarded in a small amount such as $1.
Cases involving nominal damages are usually brought on principle.
"Plaintiff says chicken means a young chicken, suitable for broiling and frying.
Defendant says chicken means any bird of that genus that meets contract
specifications on weight and quality, including what it calls stewing chicken and
plaintiff pejoratively terms fowl.
Rules of Contract
Interpretation
89
-(Frigaliment Importing Co. v. B.N.S. International Sales Corp., 190 F. Supp.

116 (S.D.N.Y. 1960) at 116.)
Issues of contract interpretation are pervasive a civil litigator does not find it
surprising that (parties might litigate the meaning of the word chicken)
Issues of contract interpretation have enormous commercial implications for the

parties themselves (the meaning of the word chicken can involve large sums
of money)
At the same time, for the most part, issues of contract interpretation have no
greater social implication (courts are simply concerned to get the intended
meaning right)
Many construction disputes arise out of terms set forth in the contract.
Unfortunately, many construction contracts were never reviewed by a

construction attorney and are not models of clarity.
Because many disputes are won or lost depending on the interpretation of the
contract terms, it is imperative that those in the construction industry have in
their skill set at least a basic knowledge of the rules and law governing contract
interpretation.
One key issue in any contractual dispute is whether the court will allow the
parties to introduce extrinsic evidence regarding how the subject contract should
be interpreted.
While the law varies from jurisdiction to jurisdiction, generally two competing
philosophies exist with respect to when extrinsic evidence may be admitted to
explain or interpret the contract.
The four corners philosophy (also known as the plain language approach)
typically requires a court or trier of fact to discover an ambiguity before allowing
the introduction of extrinsic or parol evidence to supplement or explain
contractual terms.
On the other hand, the intent of the parties philosophy (also often referred to
as the Corbin approach) typically allows the introduction of extrinsic and/or
parol evidence regardless of whether the underlying contract is determined to
be ambiguous. The four corners method has been, and continues to be, the
most widely accepted method of contract interpretation in the United States.
courts and tribunals utilize various well-known rules of contractual interpretation

in testing the reasonableness of proffered contractual interpretations.
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General Rules of Contract Interpretation :-
The Whole Agreement Rule: Simply put, the whole agreement or

harmonize rule expresses the preference that the interpretation of the
contract that renders all portions of the contract valid and enforceable, or in
harmony, as opposed to rendering any portion of the contract superfluous,
inoperative, or void, is preferred. In the majority of cases, the invocation of the
whole agreement rule benefits owners over contractors because the rule
typically operates to place upon contractors the obligation to perform work when
any part or portion of the contract can be construed to require the work.
General Rules of
Contract
Interpretation :-
Specific Versus General Contract Terms: This well-known and often used
rule holds that specific terms and exact terms are given greater weight than
general contract language.
Ordinary and Normal Meanings of Contract Language: Pursuant to this

rule, contractual language is to be given its normal and ordinary usage unless
circumstances exist to consider alternative meanings.
Technical Meaning Governs Over Ordinary Meaning: While contractual

language is to be given its normal and ordinary meaning, some words have both
an ordinary and technical meaning. This rule holds that courts interpreting
contracts that contain words that have both ordinary and technical meanings
should utilize the technical meaning unless evidence suggests that the parties
intended otherwise.
Expressio Unius Est Exclusio Alterius: This rule, translated as inclusion of

one is exclusion of the others, typically applies when lists of items or services
are included in construction contracts. When disputes arise regarding scopes of
work or materials to be provided, this rule can be invoked to demonstrate that
the specific inclusion of lists of work and/or materials that are included in the
scope of work demonstrates that the parties did not intend for work or materials
that were not listed to be included in the scope of work.
Course of Dealing: If the disputing parties have acted a certain way in

interpreting similar language in the past, this course of dealing may be used to
demonstrate that the parties intended to treat the disputed language in the
same way.
Construing Ambiguities Against the Drafter: Finally, many jurisdictions hold

that contract ambiguities are construed against the drafter of the document,
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especially if the application of other rules of construction fails to resolve the

issue.
The Nine Fundamental Precepts(Law, Directives)

1. Words and their context -The courts have increasingly recognized that context is
central to interpretive accuracy. Context has two aspects 1. The context of the
document , 2. The surrounding circumstances
2. A contract is to be construed as a whole with meaning given to all of its
provisions- The normal rules of construction of a contract require that the
various clauses of a contract cannot be considered in isolation but must be given
an interpretation that takes the entire agreement into account.
3. The factual matrix- In a commercial contract it is certainly right that the court
should know the commercial purpose of the contract and this in turn
presupposes knowledge of the genesis of the transaction, the background, the
context, the market in which the parties are operating.
4. Interpretation is an objective exercise- The contractual intent of the parties is to
be determined by reference to the words they used in drafting the document,
possibly read in light of the surrounding circumstances which were prevalent at
the time. Evidence of one partys subjective intention has no independent place
in this determination
5. Commercial efficacy- Commercial contracts must be interpreted in accordance
with sound commercial principles and good business sense
6. Every effort should be made to find a meaning - [E]very effort should be made
by a Court to find a meaning, looking at substance and not mere form, and that
difficulties in interpretation do not make a clause bad as not being capable of
interpretation, so long as a definite meaning can properly be extracted.
A contract is to be interpreted as of the date it was made -It is a fundamental
rule of contractual interpretation that the intention of the parties is to be
determined as of the time when the contract is made
8.
The parol (stated or declared) evidence rule -It basically only applies to
preclude evidence of subjective intention and to preclude evidence which
contradicts the written agreement
9. The contra proferentem rule- There are some judicial statements that it should
only be applied as a last resort or where the party seeking to rely on it did not
have an opportunity to modify the terms of the contract.
Its only real effect in interpretation of guarantees and insurance policies
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Nepal Contract Act
Read Nepal Contract Act, 1999
Assessment -3
A plumber accidentally installs a sprinkler system in the lawn of the

wrong house. The owner of the house had learned the previous day
that his neighbor was getting new sprinklers. That morning, he sees
the plumber installing them in his lawn. Pleased at the mistake, he says
nothing, and then refuses to pay when the plumber delivers the bill.
Will the man be held liable for payment? If yes, Why? If no, Why?
93
5. Tort and Crime

Introduction to Criminal Law
and Tort Low
Type of Tort and Professional
Negligence
Tort and Third Party Liability
Tort and the Project Manager
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Crime
An action or omission which constitutes an offence and is punishable by law.
An act punishable by law, as being forbidden by statute or injurious to the public

welfare An evil or injurious act; an offence,
A crime is a wrongdoing classified by the state or Congress as a felony or

misdemeanor.
Felonies (more serious offenses -- like murder or rape)
Misdemeanors (less serious offenses -- like petty theft or jaywalking).
A crime is an offence against a public law. This word, in its most general sense,
includes all offences, but in its more limited sense is confined to felony.
The term offence may be considered as having the same meaning, but is usually
understood to be a crime not indictable but punishable, summarily or by the
forfeiture of a penalty.
A crime occurs when someone breaks the law by an overt act, omission or
neglect that can result in punishment.
A person who has violated a law, or has breached a rule, is said to have
committed a criminal offense.
Ignorance of the law is no exception means that you can be held liable even when you break a law that you
didn't know existed.
Types of Crime
There are two main categories of crime:
Personal /Violent crime and Property crime
Personal / Violent Crimes: A violent crime occurs when someone harms,

attempts to harm, threatens to harm or even conspires to harm someone else.
Aggravated assault: Unlawfully attacking another person to inflict
severe or aggravated bodily injury, usually accompanied by the use of a
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weapon or by other means likely to produce death or grave bodily harm.

Attempted aggravated assault that involves the use or threat of use of a
gun, knife or other weapon is included in this crime category because
serious personal injury likely would result.
Forcible rape: The carnal knowledge of a female forcibly and against
her will. It includes assaults and attempts to commit rape by force or
threat of force but excludes statutory rape (without force) and other sex
offenses.
Murder: Killing a human in a wilful and non-negligent manner.
Robbery: Taking or attempting to take anything of value from a person by
force or threat of force or violence.
Property Crimes: damaging, destroying or stealing someone else's property,

such as stealing a car or vandalizing a building.
Arson: Wilfully or maliciously burning or attempting to burn, with or
without intent to defraud, a house, public building, motor vehicle, aircraft
or personal property.
Burglary: Unlawfully entering a structure to commit a felony or theft.
Forcible entry need not have occurred.
Larceny-theft: Unlawfully taking property from another (e.g., stealing a
bicycle, pickpocketing) without force, violence or fraud.
Omission Can Be a Crime

But there are also crimes that are neither violent nor involve property
damage. Running a stop sign is a crime, because it puts the public in
danger, even though no one is injured and no property is damaged. If the
law is not obeyed, there could be injury and damage.
Criminal law
Criminal law
is the body of rules and statutes defining the offences against the
community at large.
It regulates how suspects are investigated, charged and tried.
The law also provides the punishments for convicted offenders.
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This is also termed as penal law.

Criminal law, also known as penal law, pertains to crimes and punishment.
It thus regulates the definition of and penalties for offences found to have
a sufficiently deleterious social impact but, in itself, makes no moral
judgment on an offender nor imposes restrictions on society that
physically prevents people from committing a crime in the first place.
Investigating, apprehending, charging, and trying suspected offenders are

regulated by the law of criminal procedure
The phrase criminal law as it is commonly used includes only substantive

criminal law. Substantive criminal laws define particular crimes.
Enforcement of criminal laws in the most of the States has traditionally been a
matter handled by the states.
In criminal law, punishment is allowed due to the wrongful intent involved in the
crime.
A punishment such as incarceration seeks to give any victim involved retribution

against the offender, deter the criminal from future criminal acts, and hopefully
rehabilitate the offender.
This is distinguished from civil law, which seeks to compensate the injured party
rather than punish the wrongdoer.
Criminal acts are considered offences against the whole of a community.
The state, in addition to certain international organizations, has responsibility for

crime prevention, for bringing the culprits to justice, and for dealing with
convicted offenders.
The police, the criminal courts and prisons are all publicly funded services,
though the main focus of criminal law concerns the role of the courts, how they
apply criminal statutes and common law, and why some forms of behaviour are
considered criminal.
The fundamentals of a crime are known as the actus reus and the mens rea.
actus reus "guilty act" (doing that which is prohibited) and
mens rea"guilty mind" (i.e. the intent to commit the crime)
The traditional view is that moral culpability requires that one should have
recognized or intended that one was acting wrongly.
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Defences exist to some crimes A person who is accused may in certain circumstances plead they
are insane and did not understand what they were doing, that they
were not in control of their bodies, they were intoxicated, mistaken about
what they were doing, acted in self defence, acted under duress or out of
necessity, or were provoked.
These are issues to be raised at trial, for which there are detailed rules
of evidence and procedure to be followed.
Children are not criminally responsible for their actions until they are old
enough to understand the difference between right and wrong and the
nature of their actions.
Modern criminal law has been affected considerably by the social sciences,
especially with respect to sentencing, legal research, legislation, and
rehabilitation.
On the international field, 111 countries are members of the International

Criminal Court, which was established to try people for crimes against humanity
Tort
Tort?
From French for "wrong,
Generally refers to private (as opposed to public) and civil (as opposed to
criminal) offenses for which law may provide monetary compensation
(damages) to the aggrieved party as a remedy.
Tort
A Tort is a civil wrong or wrongful act, whether intentional or accidental, from

which injury occurs to another.
Torts include all negligence cases as well as intentional wrongs which result in
harm.
Therefore tort law is one of the major areas of law (along with contract, real
property and criminal law) and results in more civil litigation than any other
category.
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Some intentional torts may also be crimes, such as assault, battery, wrongful
death, fraud, conversion (a euphemism for theft) and trespass on property and
form the basis for a lawsuit for damages by the injured party.
Defamation, including intentionally telling harmful untruths about another-either

by print or broadcast (libel) or orally (slander)-is a tort and used to be a crime as
well.
From French for "wrong,"
A civil wrong or wrongful act, whether intentional or accidental, from which

injury occurs to another. Torts include all negligence cases as well as
intentional wrongs which result in harm.
Torts, are civil wrongs. To have acted tortiously, one must have breached a
duty to another person, or infringed some pre-existing legal right.
A tort is a legal term describing a violation where one person causes

damage, injury, or harm to another person. The violation may result from
intentional actions, a breach of duty as in negligence, or due to a violation
of statutes.
The party that commits the tort is called the tortfeasor. A tortfeasor incurs
tort liability, meaning that they will have to reimburse the victim for the
harm that they caused them. In other words, the tortfeasor who is found to
be liable or responsible for a persons injuries will likely be required to
pay damages.
Under most tort laws, the injury suffered by the plaintiff does not have to
actually be physical. A tortfeasor may be required to pay damages for
other types of harm, including emotional distress or a violation of personal
rights.
Tort law
In tort law, injury is defined broadly. Injury does not just mean a physical injury
Injuries in tort law reflect any invasion of any number of individual interests. This
includes- interests recognized in other areas of law, such as property rights,
actions for nuisance (annoying or hurting) and trespass (unlawful entering) of
land can arise from interfering with rights in real property
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Tort laws are laws that offer remedies to individuals harmed by the unreasonable
actions of others. Tort claims usually involve state law and are based on the
legal premise that individuals are liable for the consequences of their conduct if
it results in injury to others.
Tort laws involve civil suits, which are actions brought to protect an individuals
private rights.
Individuals rights (in General)
1. right to be free from bodily harm
2. right to enjoy a good reputation
3. right to conduct business with out wrongful interference
4. right to have property free from interference
Civil tort law is that branch of law that deals with breaches of civil duties, rather
than a contractual duty or a general societal duty.
Although many violations may be classified as either a tort or a crime, there are
some major differences between a tort and crime.
Crimes are typically prosecuted by the state, whereas any citizen who has been
injured can file a lawsuit for tort.
The injured party sues the defendant or tort feasor.
1.
Brought in civil court
2.
Seek damages
3.
Not necessarily a crime
4.
Standard preponderance of the evidence (i.e. more likely
than not)
In a tort cause of action, the person who violates tort laws is called a
tortfeasor.
The party that has suffered the tortious injury may then be entitled to receive
damages if they succeed in court.
Damages usually take the form of monetary compensation for the injuries that
the victim has received.
Tort laws define what types of legal injuries may be claimed in a civil court.
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Tort injuries are not limited to physical harm- they may also include economic,
emotional, or even injuries to ones reputation.
A person may also recover damages for violations of rights, such as property,
privacy, or constitutional rights.
Thus, civil tort claims can form the basis for a very wide variety of legal claims.
Types of Tort
Civil tort claims may be classified into three basic categories: Intentional torts,
negligence, and strict liability torts.
Each of these is associated with different standards of proof, remedies, and

defenses. The vast majority of tort claims are based on negligence.
1. Intentional torts
An intentional tort occurs where the tortfeasor acts knowingly and wilfully to
injure the victim.
Intentional tort is a civil wrong that occurs when the wrongdoer engages in
intentional conduct that results in damages to another.
Striking another person in a fight is an intentional act that would be the tort of
battery.
. Negligence
Negligence is a type of tort wherein the tortfeasor breaches a care of duty,

resulting in harm or injury to the plaintiff.
Careless conduct that results in damage to another is negligence. Striking

a person accidentally would not be an intentional tort since there was not
intent to strike the person. This may, however, be a negligent act.
3. Strict liability
Generally, liability because of a tort only arises where the defendant either
intended to cause harm to the plaintiff or in situations where the
defendant is negligent. However, in some areas, liability can arise even
when there is no intention to cause harm or negligence.
For example, in most states, when a contractor uses dynamite which

causes debris to be thrown onto the land of another and damages the
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landowners house, the landowner may recover damages from the

contractor even if the contractor was not negligent and did not intend to
cause any harm. This is called strict liability or absolute liability.
Strict Liability occurs where the tortfeasor becomes liable even if they did
not act intentionally or breach a duty of care
The Intentional Torts (: any intentional acts that are reasonably foreseeable to
cause harm to an individual, and that do so )
Assault: Threatening to strike or harm with a weapon or physical movement,

resulting in fear.
Battery: Unlawful, unprivileged touching of another person.
Trespass: Wrongful injury or interference with the property of another.
Nuisance: Anything that interferes with the enjoyment of life or property.
Interference with contractual relations: Intentionally causing one person

not to enter or to break a contract with another.
Deceit: False statement or deceptive practice done with intent to injure

another.
Conversion: Unauthorized taking or borrowing of personal property of another

for the use of the taker.
False imprisonment: Unlawful restraint of a person, whether in prison or

otherwise.
Defamation: Wrongful act of injuring anothers reputation by making false

statements.
Invasion of privacy: Interference with persons right to be left alone.
Misuse of legal procedure: Bringing of legal action with malice and without
probable cause.
Infliction of emotional distress: Intentionally or recklessly causing emotional

or mental suffering to others.
Tort and Negligence
A tort is a wrongful act or omission, constituting negligence, that results in

identifiable harm to a person and for which relief, typically in the form of
monetary damages, may be obtained by bringing a civil action in a court of law.
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Negligence may be the failure to do what a reasonably prudent person would

ordinarily have done to prevent foreseeable harm to another under the
circumstances, i.e. doing of a careless, reckless, or intentionally malicious act that a prudent
and reasonable person would not have done.
Negligence standard seeks to punish and discourage abnormal or inappropriate

action that harms others.
Negligence
Negligence is a tort which depends on the existence of a breaking of the duty of

care owed by one person to another
Negligent behavior towards others gives them rights to be compensated for the
harm to their body, property, mental well-being, financial status or relationship
Negligence is used in comparison to acts or omissions which are intentional or

willful
Principles of Negligence
Donoghue v Stevenson (Case)
A friend of Mrs Donoghue ordered an opaque bottle of ginger beer (intended for
the consumption of Mrs Donoghue) in a caf in Paisley. Having consumed half of
it, Mrs Donoghue poured the remainder into a tumbler. The decomposing
remains of a snail floated out. She claimed to have suffered from shock, fell ill
with gastroenteritis and sued the manufacturer for carelessly allowing the drink
to be contaminated. The House of Lords decided that the manufacturer was
liable for Mrs Donoghue's illness. Lord Atkin took a distinctly moral approach,
and said,
The liability for negligence ... is no doubt based upon a general public sentiment
of moral wrongdoing for which the offender must pay ... The rule that you are to
love your neighbour becomes in law, you must not injure your neighbour; and
the lawyer's question, Who is my neighbour? receives a restricted reply. You
must take reasonable care to avoid acts or omissions which you can reasonably
foresee would be likely to injure your neighbour.
Duty of Care a reasonable responsibility to act or not to act
Breach of Duty the reasonable person test. (not equal to logical, normal or
average)
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Proximate Cause without breach the result would not have occurred. (not
equal to actual cause)
Actual harm (i.e. physical injury, property damage)
Measurable Damages- a financial loss ( may include pain and suffering)
Types of Tort
Strict Liability
In law, strict liability is a standard for liability which may exist in either a
criminal or civil context.
A rule specifying strict liability makes a person legally responsible for the
damage and loss caused by his or her acts and omissions regardless of
culpability
Strict liability is prominent in tort law (especially product liability), corporations

law, and criminal law. For analysis of the pros and cons of strict liability as
applied to product liability, the most important strict liability regime, see product
liability.
Strict liability in tort is the concept that in certain situations a

defendant is liable for plaintiff's damages without any requirement that
the plaintiff prove that the defendant was negligent
Strict Liability
The doctrine of strict liability-Applies to ultra-hazardous activities that involve a great risk to people
and property.
-If the subcontractor makes a mistake, the contractor is strictly liable for
any damage that occurs.
Also, applies to product liability
cases in which people are injured from defects in products.
The firm that manufactures a product is liable.
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regardless of the fault for injuries to users of the product if a defect in one
of those machines.
Does not apply if company does not actively engage in the sale of that good.
Wrongful death statutes preserve the rights of third parties affected by the
death of a person to bring a lawsuit.
Punitive damages relate to gross negligence and reckless disregard goes beyond
compensation and allows the plaintiff to attack company profits.
Other Torts: Trespass
an unlawful act causing injury to the person, property, or rights of another,

committed with force or violence, actual or implied,
especially, a wrongful entry upon the lands of another.
Trespass is an area of tort law broadly divided into three groups: trespass to the
person, trespass to chattels and trespass to land.
Trespass to the person involved six separate trespasses: threats (intimidation),

assault (injury), Battery (unpermitted contact ), wounding, mayhem(disorder),
and marring (injury or damage)
Trespass to chattels, also known as trespass to goods or trespass to personal

property, is defined as "an intentional interference with the possession of
personal property...proximately caus[ing] injury
Trespass to land, the form of trespass most associated with the term trespass,
refers to the "wrongful interference with one's possessory rights in [real]
property
Third party Liability: Vicarious Liability
Vicarious liability sometimes called "imputed liability," attachment of

responsibility to a person for harm or damages caused by another person in
either a negligence lawsuit or criminal prosecution.
Vicarious liability is a form of strict, secondary liability that arises under the
common law doctrine of agency respondeat superior the responsibility of the
superior for the acts of their subordinate, or, in a broader sense, the
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responsibility of any third party that had the "right, ability or duty to control" the
activities of a violator.
-Parent and child,
-Owner of a vehicle and driver, and
-Employer and employee.
Ordinarily the independent negligence of one person is not imputable to another

person
Vicarious Liability: Employers' liability
Employers are vicariously liable, under the respondent superior doctrine, for
negligent acts or omissions by their employees in the course of employment
However, the employer of an independent contractor is not held vicariously

liable for the tortious acts of the contractor, except where the contractor injures
someone to whom the employer owes a non-delegable duty of care, such as
where the employer is a school authority and the injured party a pupil.
Employers are also liable under the common law principle represented in the
Latin phrase, "qui facit per alium facit per se", i.e. the one who acts through
another, acts in his or her own interests.
Vicarious Liability: Principals' liability
The owner of an automobile can be held vicariously liable for

negligence committed by a person to whom the car has been loaned, as
if the owner was a principal and the driver his or her agent, if the
driver is using the car primarily for the purpose of performing a task
for the owner.
Courts have been reluctant to extend this liability to the owners of

other kinds of chattel. For example, the owner of a plane will not be
vicariously liable for the actions of a pilot to whom he or she has lent it
to perform the owner's purpose.
Vicarious Liability: Parental liability

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In the United States, the question of parental responsibility generally and the
issue of parental vicarious liability for the torts of their children is evolving.
What is clear is that parents can be held liable for their own negligent acts, such
as failure to supervise a child, or failure to keep a dangerous instrument such as
a handgun outside the reach of their children
The liability of corporations in tort
In English law, a corporation can only act through its employees and agents so it
is necessary to decide in which circumstances the law of agency or vicarious
liability will apply to hold the corporation liable in tort for the frauds of its
directors or senior officers.
If liability for the particular tort requires a state of mind, then to be liable, the
director or senior officer must have that state of mind and it must be attributed
to the company
If a director or officer is expressly authorised to make representations of a

particular class on behalf of the company, and fraudulently makes a
representation of that class to a Third Party causing loss, the company will be
liable even though the particular representation was an improper way of doing
what he was authorised to do
Vicarious Liability:
Employers' indemnity
The principle of vicarious liability can also be bypassed with a legal instrument
known as Employers' indemnity. When an employer is successfully sued, they
have the option of suing the tortfeasor for an indemnity to recover the damages
back
Non-vicarious liability
Non-vicarious liability for the acts of third parties is distinguishable from the
traditional doctrine of vicarious liability insofar as it relates to a form of primary
liability predicated upon the personal fault of the defendant.
More conveniently termed 'third party liability', it is a novel category of tortious

liability that has evolved from a collection of disparate and isolated judicial
decisions setting out, on an entirely ad hoc basis, individualized exceptions to
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the entrenched common law rules against liability for omissions and liability for
the acts of others.
Tort actions
Torts can take the form of causing
actual physical or psychological injuries;
violating a business relationship by fraud, libel, or slander;

or any other negligent act or omission that causes economic
losses to another.
A tort claim is a civil action between private parties in contrast to a

criminal action brought by the government for which the penalty can
include imprisonment.
The basic principle of the tort system is that whoever is at fault for
causing an injury must pay the costs for negligent or irresponsible
behavior.
Generally, compensation is based on the portion of blame assigned to

each individual involved and can involve monetary payments for
economic, noneconomic, and punitive damages
In general, a tort claim seeks redress by relying on the civil justice

system to assign fault and, as much as practicable, to make an injured
or wronged person whole again by forcing the guilty party (tortfeasor) to pay for the harmed persons present and future medical
expenses, income reduction, or other tangible or intangible losses.
While money alone is often inadequate to compensate a person for the

severe pain and suffering resulting from physical or mental injuries or
loss of reputation, it is the chief remedy available to the civil court.
Other remedies include Injunctions (court orders to make someone do something or to

prohibit an action),
Evictions, garnishment, and attachment (repossession of property
pursuant to an unpaid debt).
Awarding of money is also designed to punish wrongdoing and provide

warnings in hopes of preventing similar behavior in the future.
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Defenses to Negligence
Contributory Negligence
If only one party is responsible for the whole incident, then he or she pays
all of the costs. Multiple tort-feasors can be required to share the costs,
based on their portion of the fault, as determined by the judge or jury.
Comparative Negligence
If the plaintiff's responsibility is shared with others, his or her liability is
compared to each of the defendant's and damage awards may be reduced
proportionately.
Joint and several liability

if multiple persons are found to be at fault, and one or more of them, is
unable to pay the monetary damages assessed, the remaining dependents
may be required to assume responsibility for the remainder (so called
"deep pockets)
Damages in Negligence
Economic damage
compensation for the actual and estimated costs of present and future
medical care, loss of income or earning capacity, harm to reputation, and
damage or loss of property.
Noneconomic damages
can include awards for pain and suffering- mental distress, worry or
emotional anguish of the injured individual embarrassment or humiliation,
loss of enjoyment of the normal activities benefits and pleasures of life,
loss of well being or bodily function, and the loss of society consortium
companionship and affection suffered by the family of a person who is
severely injured or dies as a result of a tortuous act.
Punitive damages
may be awarded to the victim but are intended to serve as punishment to
the party at fault and to deter similar future wrongdoing by the guilty
party and others in similar situations.
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Tort Law Overlap with Criminal Law
Tort law is one of the major areas of law (along with contract, real property and
criminal law) and results in more civil litigation than any other category.
There is some overlap between criminal law and tort, since tort, a private action,
used to be used more than criminal laws in the past. For example,
in English law an assault is both a crime and a tort (a form of trespass to
the person).
Many jurisdictions, especially the US, retain punitive elements in tort
damages, for example in anti-trust and consumer-related torts
Some intentional torts may also be crimes, such as assault, battery, wrongful
death, fraud, conversion (a euphemism for theft) and trespass on property and
form the basis for a lawsuit for damages by the injured party.
Defamation, including intentionally telling harmful untruths about another-either

by print or broadcast (libel) or orally (slander)-is a tort and used to be a crime as
well.
in English law an assault is both a crime and a tort (a form of trespass to the
person).
A tort allows a person, usually the victim, to obtain a remedy that serves their
own purposes (the payment of damages to a person injured in a car accident, or
the obtaining of injunctive relief to stop a person interfering with their business).
Criminal actions on the other hand are pursued not to obtain remedies to assist
a person although often criminal courts do have power to grant such
remedies but to remove their liberty on the state's behalf.
That explains why incarceration is usually available as a penalty for serious

crimes, but not usually for torts.
Overlap in Criminal Law and Tort Law
The more severe penalties available in criminal law also means that it requires a
higher burden of proof to be discharged than the related tort.
Many jurisdictions, especially the US, retain punitive elements in tort damages,
for example in anti-trust and consumer-related torts, making tort blur the line
with criminal acts.
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Also there are situations where, particularly if the defendant ignores the orders
of the court, a plaintiff can obtain a punitive remedy against the defendant,
including imprisonment.
Some torts may have a public element for example, public nuisance and
sometimes actions in tort will be brought by a public body.
Also, while criminal law is primarily punitive, many jurisdictions have developed
forms of monetary compensation or restitution which criminal courts can directly
order the defendant to pay to the victim.
Difference Between Criminal Law and Tort Law
The main difference between a criminal law and civil law has to do with the type
of punishment involved.
Criminal offenses may lead to incarceration in a jail or prison facility.
However, for civil violations such as torts, the person may not be
incarcerated. The punishment will have to take the form of monetary
damages, or an injunction (a court order requiring the person to cease
their violations).
Also, criminal offenses are handled by prosecutors who are employed by
the state.
This means that criminal offenses are often associated with a variety of
protections for the defendant to prevent abuses by the state.
Some examples of these protections are search and seizure provisions and
issues with evidence. Many of these protections are not available in a civil
claim.
Tort and Contract
There are some legal actions that mix elements of contracts and torts
so thoroughly that we can't separate them.
Torts are related in many ways to contracts.
With contracts, a duty spelled out in an agreement may be violated,

which results in injury.
In the case of torts, the duty comes from general laws or customs.
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Cases involving a combination of contract and tort are different from

pure torts only in the origin of the duty involved
Assignment
Capacity of the parties
the conflict of laws rules are different for contract and tort
Damages
a minor is liable for their torts but is limited in liability in relation

to contract
Conflict of laws
you can assign a debt but you cannot assign a right of action in
tort
there are significant differences between the measures of

damages recoverable in contract and tort
Limitation of actions
although both contract and tort claims basically have the same
limitation period, there are important differences regarding the
time from which the cause of action accrues
The main differences between contract and tort are:
Duties in tort are determined by the law - duties in contract are chiefly
determined by the parties.
i.e. you choose to be bound under a contract but you cannot
choose whether or not to be bound under the law.
Duties in tort are commonly owed to persons generally whereas those

in contract are towards a specific person or persons.
Contract law is based on an enforceable agreement. Breaches of the

agreement cause the damage, e.g. selling a faulty car while saying it
was like new in the agreement.
Tort law is usually focused on foreseeable negligence causing damages,

e.g. Driving while drunk and hitting someone.
What are the similarities of law of tort and contract ?

112
Civil Proceedings in both.
What is the difference between a tort and contract?
A contract is written agreement between two or more parties. It

defines how the parties will act.
A tort is an injury done to a person or their property.
The problem of design

Designers duties.
Delegation of design duties.
Delegation of management duties.
Limitations of liability and actions.
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Engineering Design
The profession of civil engineer is- the art of directing the great sources of
power in nature for the use and convenience of human (ICE Charter)
The Engineering Design Process is a series of steps that engineers use to guide
them as they solve problems.
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While having a guide is useful for novices who are learning about engineering, it
is important to note that practicing engineers do not adhere to a rigid step-bystep interpretation of the process. Rather there are as many variations of the
model as there are engineers.
The Engineering Design Process is cyclical and can begin at any step, or move
back and forth between steps numerous times. In real life, engineers often work
on just one or two steps and then pass along their work to another team.
Design Problem
We described engineers primarily as problem solvers.
What distinguishes design from other types of problem solving is the nature of
both the problem and the solution.
Design problems are open ended (have more than one correct solution) in
nature.
The result or solution to a design problem is a system that possesses specified

properties.
Solving design problems is often an iterative process: As the solution to a design

problem evolves, you find yourself continually refining the design.
While implementing the solution to a design problem, you may discover that the
solution you've developed is unsafe, too expensive, or will not work. You then
"go back to the drawing board" and modify the solution until it meets your
requirements.
Solution of the Design

Problem
Design activity is cyclic or iterative in nature, whereas analysis problem solving

is primarily sequential.
The solution to a design problem does not suddenly appear in a vacuum.
A good solution requires a methodology or process.
There are probably as many processes of design as there are engineers.
Since design problems are usually defined more vaguely and have a multitude of
correct answers, the process may require backtracking and iteration.

115
Solving a design problem is a contingent process and the solution is subject to

unforeseen complications and changes as it develops.
The Engineering Design

Process
The engineering design process is a methodical series of steps that engineers

use in creating functional products and processes.
Most engineering designs can be classified as inventions-devices or systems that

are created by human effort and did not exist before or are improvements over
existing devices or systems. Inventions, or designs, do not suddenly appear from
nowhere.
They are the result of bringing together technologies to meet human needs or to
solve problems.
Sometimes a design is the result of someone trying to do a task more quickly or

efficiently.
Design activity occurs over a period of time and requires a step-by-step

methodology.
1 Research
2 Feasibility
3 Conceptualization
4 Establishing the design requirements
5 Preliminary design
6 Detailed design
7 Production planning and tool design (Shop Design)
8 Production
The five steps used for solving design problems are:
1. Define the problem
2. Gather pertinent information
General Aspects of
Engineering Design
116
3. Generate multiple solutions
4. Analyze and select a solution
5. Test and implement the solution
ASK
What is the problem?
What have others done?
What are the constraints?
IMAGINE
What are some solutions?
Brainstorm ideas.
Choose the best one.
PLAN
Draw a diagram.
Make lists of materials you will need.
CREATE
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Follow your plan and create it.

Test it out!
IMPROVE
Talk about what works, what doesn't, and what could work better.
Modify your designs to make it better.
Test it out!
After you improve your design one, you may want to begin the
Engineering Design Process all over again to refine your technology. Or
you may want to focus on one step. The Engineering Design Process can
be used again and again!
Who is the design

Professional?
Architect, Engineers, Surveyor, Quantity Surveyor

Education
Licensure
Training
Design Firms
Recognized by state licensing statutes
Individual professional licensed
Employer must be registered
Sole proprietorships, partnerships, limited liability companies,
corporations, etc.
Issue of poor or defective design

Obligation to the Public is paramount, but
Relationship with design

Consultants?
should also honor his obligation to Employer if possible
Design contracts
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Employer Designer Specialist Designer
Construction Contracts
Two-Party system
Three-party system
Project Delivery System

Traditional D-B-B
Design-Build (D-B)
CM
PPP
BOT
BOO, etc.
Professional
negligence and
Professional
Negligence
Designers
duties
Professional negligence, which may also be referred to as malpractice,

is negligence committed by someone who is presented with more skills and
training than the average person.
Professional negligence is a breach of the duty of care between professionals

and their clients. The duty of care is a common law arrangement where the
client expects a level of professionalism and standards commonly held by those
in the profession.
As a consequence of being more highly skilled, professionals are held to a higher

standard and are expected to be able to complete tasks related to their training
in a competent way.
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A common law legal system is a legal methodology that places a significant

weight on precedent and on the principle that it is unfair to treat similar legal
matters differently on different occasions.
Professional Negligence:
Engineering
Builders and Architects maintain a duty of care with owners and tenants to
ensure that the building they erect will adhere to government regulations and
common practices for the construction of buildings.
An Engineer/ Architect undertaking any work in the way of his profession accepts
the ordinary liabilities of any man who follows a skilled calling.
He is bound to exercise due care, skill and diligence. He is not required to have
an extraordinary degree of skill and diligence. But he must bring to the task that
he undertakes the competence and skill that is usual among architects
practising their profession. And he must use due care.
If he fails in these matters and the person who employed him suffers damage,
he is liable to that person. This liability can be said to arise either from a breach
of contract or in tort.
Project phase where designers

tend to be negligent
Pre-design
Negligence in Survey
Geotechnical investigation, etc.
Design
Marginal designs/ Over design
Design Calculation
Service delivery
Advising client
Statutory consent/permit
Supply information
Supervision
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Inadequate Attendance to site

Failure in Defect identification and correction.
Duties and Responsibilities of

E/A
Engineers, architects and code enforcement professionals have substantially

different viewpoints about their own roles and responsibilities, and the
responsibilities of others, for ensuring adherence to the standard codes
provisions in the design and construction process.
Actions for professional malpractice may allege a host of claims, theories and
causes of action. At their core, however, these actions are suits for negligent
performance of professional responsibilities, i.e., breach of the standard of care.
Designers General Duties
A proper definition of design responsibility begins with an analysis of a design

professionals legal duties whether imposed by state licensing laws, permitting
agency rules or practices, professional ethical standards, or contracts.
Design firms frequently do not fully understand the legal or professional duties
that arise from these sources and, consequently, do not properly address them
in their contracts.
STATUTORY DUTIES- Stated by various statutory provisions of the state Planning, Design, Supervision
CONTRACTUAL DUTIES- Provisioned by the contract with client- Express Terms,

Implied Terms, Degree of Skill, Delegation of Duties
DUTIES INDEPENDENT OF CONTRACT
Duties to the non contracting parties comes from Tort

third parties, contractors and subcontractors
To safeguard the interest of the Employer, the designer shall have the following
General Duties To advise and consult with the employer as to any limitation of Land,
Legislation, Restrictive Covenants, Rights of Adjoining Owners and Public
To Examine the Site, Sub-soil and Surroundings.
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To consult with and advise the employer as to the proposed work.

To prepare and submit the employer the primary design drawing (sketch)
with probable cost.
To elaborate and, if necessary modify or amend the sketch, plans and then
to prepare contract documents.
To consult with and advise the employer as to form of contract to be used.
To bring the contract documents in their final stages
Detailed Duties of the

Engineers/ Consultant
The detailed duty of a Consultant may comprises:
Site Investigation
Feasibility Studies
Cost Estimates
Knowledge of legislation, regulations and bye-laws etc.
Recommending builders
Recommending form of contract
Administration of contract
Plans, drawings, specifications
Supervision
Clerk of works
Certification
Temporary Occupation Permit
Detection of Defects
Liability of the Er/ Designer
It is the designers duty to translate the owners needs and requirements into
drawings and specifications to be used during construction.
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During the construction phase, the architect may assist the owner with such
services as monitoring the progress of the work, verifying the specified level of
quality is being achieved, and certifying payment applications.
The architect should provide unbiased interpretations of the contract documents

and give additional instructions as needed to enable the contractor to perform
its work.
Fitness for Purpose
Negligent Misstatement
Statutes, By-Laws and Building Regulations
Examination of the site above and below the ground
Public and Private Rights
Plans, Design and Specification
Revision of Design During Construction
Novel and Risky Design and Employers Interference in Design- Some

Exemptions with condition
Delegation of design duties
Delegation
Delegation is the assignment of authority to another person to carry out the

specific job-related activities. It allows a subordinate to make decisions; that is, it
is a shift of decision-making authority from one organisational level to another
lower one.
Delegation should not be confused with participation. In participative decision

making, there is a sharing of authority; with delegation, subordinates make
decisions on their own. Effective delegation pushes authority down vertically
through the ranks of an organisation.
Delegation of Design Duties

123
The appointment of an architect, as with most professional persons is personal

to himself. He cannot delegate his duty to be performed by someone else.
In practice however, due to the complexities of some projects an architect will

usually delegate a substantial proportion of the technical aspects of design to
other skilled professionals like mechanical & electrical engineers, civil &
structural engineers, quantity surveyors, etc. Where an architect undertakes the
design and
Supervision of a building project under an umbrella arrangement, he should let

the client know that he is delegating other aspects of the design like the
mechanical & electrical design work and structural design work to other
professionals.
Issues
Necessary skills of designer
Contract type: personal or with firm
Benefit for better skills and knowledge
Contract
Design responsibilities
Quite apart from the aesthetic designs of a building, the design responsibilities
of an architect can extend to specifications, selection of finishes choice of
construction techniques.
He must exercise skill and care in the execution of his designs and in the choice
and specification of materials.
A Designer usually delegates his duties in one of the following ways:
engages specialist(s) directly and pays fee to the specialist from the
designers own
advises the employer to engage specialist(s) directly
obtains a design, usually free of charge, from a sub contractor who usually
later becomes a nominated sub contractor
Delegation of management duties
A sign of a good leader is how they are able to delegate.

124
A good manager needs to get the work done through others. This is the best way
to accomplish more every day.
The basic definition of delegating is assigning duties to another person or

persons while still being held accountable. The most important thing is to know
whom to delegate to and when.
You should make sure you know exactly what needs to be accomplished before
you give the task to someone else.
Some managers make the mistake to not delegate because they think that if
they hold all of the cards, they are indispensable.
On the contrary, you are more indispensable when you show your leadership
skills by delegating.
You are more likely to get praised or even promoted when you show your
leadership skills, and not because you know something that someone else
doesnt know.
Delegation is one of the most important management skills. These logical rules
and techniques will help you to delegate well (and will help you to help your
manager when you are being delegated a task or new responsibility - delegation
is a two-way process!).
Good delegation saves you time, develops you people, grooms a successor, and
motivates. Poor delegation will cause you frustration, demotivates and confuses
the other person, and fails to achieve the task or purpose itself.
So it's a management skill that's worth improving. Here are the simple steps to
follow if you want to get delegation right, with different levels of delegation
freedom that you can offer.
Delegation is a very helpful aid for succession planning, personal development and seeking and encouraging promotion. It's how we grow in the job - delegation
enables us to gain experience to take on higher responsibilities
Delegation and SMART, or SMARTER
A simple delegation rule is the SMART acronym, or better still, SMARTER. It's a
quick checklist for proper delegation.
Delegated tasks must be:
Specific
Measurable
125
Agreed
Realistic
Time bound
Ethical
Recorded
Steps of successful delegation
Define the task
Select the individual or team
Assess ability and training needs
Explain the reasons
State required results
Consider resources required
Agree deadlines
Support and communicate
Feedback on results
Delegation of Authority
Delegation of authority is one vital organizational process. It is inevitable along

with the expansion and growth of a business enterprise.
Delegation means assigning of certain responsibilities along with the necessary

authority by a superior to his subordinate managers.
Delegation does not mean surrender of authority by the higher level manager. It
only means transfer of certain responsibilities to subordinates and giving them
the necessary authority, which is necessary to discharge the responsibility
properly.
Delegation is quite common in all aspects of life including business.
In delegation, an attempt is being made to have meaningful participation and

cooperation from the subordinates for achieving certain well-defined results.
126
Due to delegation, the routine responsibilities of the superior are reduced. As a

result, he concentrates on more urgent and important matters.
Secondly, due to delegation, subordinate becomes responsible for certain

functions transferred to him.
Delegation is a tool, which a superior manager uses for sharing his work with the
subordinates and thereby raising his efficiency.
Delegation is not a process of abdication. The person who delegates does not
divorce himself from the responsibility and authority with which he is entrusted.
He remains accountable for the overall performance and also for the
performance of his subordinates.
Delegation is needed when the volume of work to be done is in excess of an

individual's physical and mental capacity.
Delegation involves the following three basic elements:
1. Assignment of duties to subordinates,

2. Granting of authority to enable the subordinates to perform the duties assigned,
and
3. Creation of obligation on the part of subordinate to perform duties in an orderly
manner.
Objectives of Delegation of Authority
To reduce the excessive burden on the superiors i.e., executives and

managers functioning at different levels.
To provide opportunities of growth and self development to junior executives.
To create a team of experienced and matured managers for the Organisation.

It acts as a technique of management and human resource development.
To improve individual as well as overall efficiency of the Organisation.

Process of Delegation of Authority
Delegation process involves four distinct stages. The process of delegation

moves through these stages. The following figure shows the stages in the
process of delegation of authority.
127
Limitation of Liability (LoL)
LoL is a contractual clause between a design professional and their client that
limits the damages recoverable by the client from the design professional.
It is not applicable in a third party injury case a pedestrian hit by glass that
falls out of the building or a job site injured worker. The claims of these nonsignatories to the design contract are not affected by the Limitation of Liability
clause.
Are these Clauses legal and enforceable?- It depends
Generally, well written clauses have been upheld. However, it is a state by state
issue and analysis of the law applicable to the design contract is essential.
Basic Requirements of LoL Clause
1. Protect individual professionals and employees in addition to the firm.
2. Some form of monetary limitation.
3. Broad description of claims limited.
Common Options for a Monetary Limitation
Fixed amount or fee charged, whichever is greater.

Fixed dollar amount or fee charged, whichever is lesser.
Fixed Amount.
Available liability insurance limits.
Typical LoL clause-
AIA Limitation of Liability based on fee or fixed amount:
128
a. Neither the Architect, Architects consultants, nor their agents or

employees shall be jointly, severally or individually liable to the
Owner in excess of the compensation to be paid pursuant to this
Agreement or Dollar ($), whichever is greater, by reason of any act
or omission, including breach of contract or negligence not
amounting to a wilful or intentional wrong.
AIA Limitation of Liability based on insurance limits:

a. Neither the Architect, Architects Consultants, nor their agents or
employees shall be jointly, severally or individually liable to the
Owner for an amount in excess of the proceeds of the available
professional liability insurance coverage.
AIA Limitation of Liability to amount of compensation:

a. In consideration of a reduction represented in the Architects
compensation, the parties agree that neither the Architect,
Architects consultants, nor their agents or employees shall be jointly
or individually liable to the Owner in an amount in excess of the
Architects compensation.
What kind of reasons are expressed when these clauses are not
enforced?
a. Licensing Laws
b. Anti-indemnity statutes
c. Public Policy
2010 Virginia Statute
No such corporation, partnership, sole proprietorship, limited liability

company, or other entity, or any affiliate thereof, shall on its behalf or on
behalf of any such licensee or certificate holder, nor any licensee or
certificate holder, be prohibited from (i) purchasing or maintaining
insurance against any such liability; (ii) entering into any indemnification
agreement with respect to any such liability; (iii) receiving indemnification
as a result of any such liability; or (iv) limiting liability through contract.
LoL- Not always enforceable
New Hampshire Town of Bow v. Provan & Lorber, Inc.

129
Limitation of Liability To the fullest extent permitted by law, the total liability in
the aggregate of PLI and PLIs officers, directors, employees, agents, and
independent professional associates, and any of them to CLIENT and any one
claiming by, through, or under Client, for any and all injuries, claims, losses,
expenses, or damages whatsoever arising out of or in any way related to PLIs
services, the project, or this Agreement, from any cause or causes whatsoever,
including but not limited to, the negligence, errors, omissions, strict liability,
breach of contract, misrepresentation, or breach of warrant of PLI or PLIs
officers, directors, employees, agents or independent professional associates, or
any of them, shall not exceed the total compensation received by PLI under the
Agreement, or the total amount of $50,000, whichever is greater In the event
the CLIENT is unwilling to limit PLIs liability as set forth above, this limitation
may be waived for additional fee consideration.
Engineering services for the design of public bridges are of great

importance to the public. Thus, a clause limiting the liability of a
professional engineering firm for the design of a public bridge is
unenforceable as a matter of public policy.
Additionally, PLIs LOL clause violates public policy because it

interferes with the public welfare and safety.
If a party is confident that the damages for an error are limited, the
party is less likely to ensure that those errors do not occur.
Additionally, the court is hesitant to enforce a Limitation of Liability

clause for professional services contract because of a general public
policy against waiving professional liability for negligence.
Limitation of Liability
Limitation of liability
1. By contract agreement (Exclusion clauses)
2. By insurance
3. By working in partnership
4. By establishment of limited company
5. By Risk management
-Possibility of minimizing a claim
130
-Effect on the business can be limited, in case of claim
LoL: By Contract
Agreement
A) Agreement with the Employer

The Consulting Engineer has no liability whatsoever for any part of the
works not designed by him/her or under his/her responsibility unless due
to decisions taken and directives given by the Consulting Engineer in the
course of carrying out the services
The Consulting Engineer has no liability whatsoever for any damages
resulting from the act of Client, the Contractors or the Suppliers which is
not covered by the ToR or the Consulting Engineers instructions or written
advice
B) FIDIC Clause-4 (Duties and Power of the Engineer and Engineers

Representative)
Carry out duties defined in the Contract
Obtain specific prior approval as defined in contract,
Accepts responsibility for the actions of Engineers representative
Delegate in writing powers and authorities to the Engineers
Representative and give copies to the Employer and Contractor
LoL by: Risk

Management
Risk Analysis
Sources of risk
The project
The design professional
The Client
Method of project delivery
Type of contract used
Time and cost

131
Risk Assessment
Probability and impact
Risk Response
Manement
1. Acceptance
2. Mitigation
3. Allocation
4. Transfer
5. Avoidance
Limiting Risk of
Delegating design
duty
Training
Standard of practices: code, standard, etc.
Systematic design calculation
Systematic Computer input
Peer Review
Systematic Checking Procedure
132
Pokhara University
Nepal Engineering College
Centre for the Post Graduate Studies
Assignment
133
Submitted By:
S.B. Tamang
CRN-025
134

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Professional Ethics and Liability

Professional Ethics and Liability

1. General introduction on Morale and Ethics

Moral Adjective, Morale - Noun

Morality - (Latin moralitas "manner, character, proper behaviour")

It is the differentiation of intentions, decisions and actions between those that

A moral code is a system of morality (according to a

Morality may also be specifically synonymous with "goodness" or "rightness.

The philosophy of morality is ethics.

Morality and ethics

Ethics (also known as moral philosophy) is that branch of philosophy which

The word 'ethics' is "commonly used interchangeably with 'morality

Likewise, certain types of ethical theories, especially deontological ethics,

Professional Ethics and Liability

"Although Morality and Ethics are often used as synonyms,

morals are beliefs based on practices or teachings regarding how people

while ethics refers to a set or system of principles, or a philosophy or theory

There are three major areas of moral philosophy:

1. Meta-ethics Research concerning the nature of morality. It tries to

2. Normative theory How do we decide if something is right or wrong?

3. Applied ethics Is x right or wrong? (e.g. Is capital punishment right or

Ethics is the philosophy of morality and meta-ethics is the study of moral

2. Are any moral judgments true?

3. Are there moral facts?

4. Are any moral beliefs rational or justified?

5. Can we attain moral knowledge?

Professional Ethics and Liability

6. How do we know when a moral judgment is probably true or

all values based on our personal desires and interests?

What we ought to do What we morally ought to do is what's morally

Sometimes what we ought to do isn't seen as optional. Instead, we often think

Right and wrong

Something is morally bad if it makes it difficult to attain something of positive

Professional Ethics and Liability

Praise and blame

Reward and punishment

Professional Ethics and Liability

Moral and Non-moral Standards

Morality refers to is to compare and contrast it to non-moral things that are

Moral instrumental value We ought to do what is necessary to attain moral

Nonmoral instrumental value Not all instrumental value helps us achieve

Etiquette Etiquette tells us how to be polite and show respect within a

Professional Ethics and Liability

The dilemma of moral choice

Moral reasoning is a process that helps individuals think through possible

The prevalent interpretation poses moral dilemmas as problems to be solved by

If a problem cannot be solved, the failure to solve it reflects the shortcomings

What counts as a moral dilemma is difficult to determine with exactitude, and

Professional Ethics and Liability

When different domains support the mutually exclusive combinations of choices,

Professional Ethics and Liability

Thomas Hobbes (1588- 1679)

Competition, Difference and Glory are the cause of quarrel

Men were basically Good

The object of all human action is to substitute pleasure for pain

Jean Jacques Rousseau (1712- 1778)

Human life is Free but Insecure

Moral: Society and the individual

Man is a social animal lives in social groups in communities and in society

Human life and society almost go together

Man is biologically and psychologically equipped to live in groups, in society.

Professional Ethics and Liability

It is more philosophical rather than sociological because it involves the question

It is in the society that an individual is surrounded and encompassed by culture,