Question

Ted is the owner and chief executive officer of a business. He recently began an advertising campaign to promote a new product that is regulated by state law. The law is somewhat unclear. Before launching the campaign, he researched the relevant law and consulted with his attorney in an effort to comply with the law. Nevertheless, the attorney general of his state has filed a lawsuit against him for deceptive advertising. Ted's best defense is that:
a. his firm made a profit on the product.
b. he acted in good faith.
c. his attorney was incompetent.
d. the law is unfair.

Answer 1

Answer:

b. he acted in good faith.

Explanation:

To act in good faith is to have honest intention and not want to harm other parties.

Ted's actions in promoting the product were based on his understanding of the state law. The fact that the law was not clear could cause the attorney general to think he intentionally acted against the law.

So if he makes it clear he did not intentionally act against the state's directive, he can claim he acted in good faith.