Ethics & Legal Responsibilities
Define conflict of interest in professional ethics.
Conflict of interest: A clash between personal interests and fiduciary duties to a client.
List the general hierarchy of laws from broadest to most specific.
Constitutional → Statutory → Ordinances → Administrative → Case/Common → Uniform Laws.
Define billing rate and how it differs from hourly rate.
The billing rate is what a firm charges the client per hour of an employee’s time; it includes salary, overhead, and profit.
What does MSRP stand for?
Manufacturer’s Suggested Retail Price.
Define strict liability and explain why it matters in design practice.
Strict liability: A seller/designer can be held responsible for harm even without proven negligence.
Which of the following is an intentional tort?
a) Trespass
b) Negligence
c) Breach of contract
d) Strict liability
(a) Trespass (intentional).
What is “mutual assent” in contract law?
Mutual agreement by both parties to terms (offer + acceptance).
What is the typical multiplier used to calculate billing rate from hourly rate?
Roughly ×3 the hourly rate.
Define trade discount and explain who receives it.
A discount for qualified designers purchasing from vendors or manufacturers.
What is the purpose of a product warranty?
To guarantee product performance or quality for a set period.
What is the first step in the ethics complaint review process?
A complaint is filed and reviewed by affiliated professional members before a decision.
Define breach of contract and give one example.
Failure to meet obligations—e.g., a contractor not completing work by deadline.
Name three factors that affect how a designer determines a fee method.
Scope, project size/complexity, client experience, and service type
What is price fixing and why is it illegal?
Price fixing: Two or more businesses agree to sell at the same price → illegal under FTC.
List two examples of risks that can arise in interior design projects.
Examples: safety hazards, delivery damage, client injury on-site, defective products.
Explain the difference between legal misconduct and unethical behavior.
Ethical misconduct = against moral code; legal misconduct = breaks laws or contracts.
Why should payment terms never be left open-ended in a contract?
Prevents disputes and ensures fair, predictable compensation.
Explain the difference between a retainer and a deposit.
Retainer: Payment for services (applied to design time).
Deposit: Prepayment toward total goods or project cost.
Explain the difference between net price and list price
List price = public retail; net price = discounted designer cost after trade discounts.
How can clear contracts reduce liability?
Clear contracts outline duties, timelines, and payment, reducing misunderstandings and lawsuits.
Give an example of an ethical issue caused by monetary influence.
Accepting gifts or payments that bias design decisions.
Which type of contract is most appropriate for a single design consultation?
Service contract (for one consultation or defined professional service).
A designer’s hourly rate is $75. Estimate the billing rate using the ×3 rule.
$75 × 3 = $225/hour billing rate (approx.)
Why should a designer always inspect merchandise before delivery?
To verify color, condition, and accuracy—protecting against liability or defective goods.
A client trips on an uneven step in your project’s showroom—what type of law covers this situation?
Tort law (specifically negligence/premises liability) covers physical injury from unsafe design conditions.