BROWSE

Malfeasance

Definition

Misfeasance, nonfeasance, and malfeasance are types of failure to discharge public obligations existing by common law, custom, or statute.

What is 'Malfeasance'

Malfeasance is an act of outright sabotage in which one party to a contract commits an act that causes intentional damage. A party that incurs damages by malfeasance is entitled to settlement through a civil lawsuit. Proving malfeasance in a court of law is often difficult, as the true definition is rarely agreed upon.

Explaining 'Malfeasance'

Corporate malfeasance describes major and minor crimes committed by officers of a company. Such crimes may involve committing intentional acts that harm the corporation or failure to perform duties and adhere to related laws. Corporate malfeasance can result in serious problems within an industry or a country’s economy. As the incidence of corporate malfeasance increases, countries pass more laws and take more preventative measures, minimizing the amount of crime taking place globally.

Examples of Malfeasance

In October 2001, Enron Corporation disclosed a quarterly loss of $618 million. Enron was hiding significant financial losses by utilizing creative accounting under the advice of its auditor, the Arthur Anderson firm. The firm was found guilty of shredding incriminating documents pertaining to its advisory and auditing of Enron. Issuing deceptive financials and conspiring to obstruct justice by hiding or destroying documents are serious crimes.


Further Reading


Reputations and corporate malfeasance: collusive networks in financial statement fraud
link.springer.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

Corporate malfeasance and the myth of shareholder valueCorporate malfeasance and the myth of shareholder value
www.emerald.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

The effects of organizational and political embeddedness on financial malfeasance in the largest US corporations: Dependence, incentives, and opportunitiesThe effects of organizational and political embeddedness on financial malfeasance in the largest US corporations: Dependence, incentives, and opportunities
journals.sagepub.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

Malfeasance in the charitable sector: Determinants of “soft” corruption at nonprofit organizationsMalfeasance in the charitable sector: Determinants of “soft” corruption at nonprofit organizations
www.tandfonline.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

Universities Behaving Badly: The Impact of Athletic Malfeasance on Student Quality and EnrollmentUniversities Behaving Badly: The Impact of Athletic Malfeasance on Student Quality and Enrollment
journals.sagepub.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

Tax havens: conduits for corporate tax malfeasanceTax havens: conduits for corporate tax malfeasance
www.emerald.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

The great escape: The unaddressed ethical issue of investor responsibility for corporate malfeasanceThe great escape: The unaddressed ethical issue of investor responsibility for corporate malfeasance
www.cambridge.org [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

Money, malfeasance, and a Malaysian electionMoney, malfeasance, and a Malaysian election
books.google.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …

Agent compensation and the limits of bondingAgent compensation and the limits of bonding
onlinelibrary.wiley.com [PDF]
… at firms that were not subject to fraud [1, 8]. Defenders of the law and economics perspective point … were influenced by the argument that New Economy industries operated under a different set of economic rules than … Reputations and corporate malfeasance: collusive networks …



Q&A About Malfeasance


How do you prove malfeasance?

You must prove intent and causation.

How is an action in contract used for each type of malfeasance?

An action in contract can be used for any of the three types of malfeasance.

What are some examples of corporate malfeasance?

Issuing deceptive financials and conspiring to obstruct justice by hiding or destroying documents are serious crimes.

Are actions in tort and actions in contracts mutually exclusive ?

Actions in tort and actions in contracts aren't mutually exclusive; they're both available .

Why would someone commit corporate malfeasance?

Many people commit corporate malfeasance for personal gain or because they believe they will not be caught.

What happens if there is no contract involved with a duty that doesn't exist at common law ?

If there's no contract involved, then there's no liability under tort or ex delicto .

Is there any way to prevent corporate malfeasance?

Yes, countries pass laws and take preventative measures against it, minimizing the amount of crime taking place globally.

What are the three types of malfeasance?

The three types of malfeasance are misfeasance, nonfeasance, and malfeasance.

How is an action in tort used for each type of malfeasance?

An action in tort can only be used for misfeasance or malfeasances.

What does malfeasance refer to?

Malfeasance refers to failure to discharge public obligations.

What is malfeasance?

Malfeasance is an act of outright sabotage in which one party to a contract commits an act that causes intentional damage. A party that incurs damages by malfeasance is entitled to settlement through a civil lawsuit. Proving malfeasance in a court of law is often difficult, as the true definition is rarely agreed upon.

Can you give an example where both actions would apply ?

Yes; it'd be like if someone was injured by a defective product , but the manufacturer didn't have any contact with them (no contractual relationship). In this case, they could bring suit against the manufacturer under products liability laws , as well as sue them civilly .

When does a duty not exist at common law?

A duty that doesn't exist at common law is created when a contract creates one.

Is it possible to bring two separate suits against someone who has committed multiple acts of negligence ?

No; courts won't allow it because it would lead to double recovery .

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