Doctrine Of Utmost Good Faith

What Does Doctrine Of Utmost Good Faith Mean?
A minimum standard that requires both the buyer and seller in a transaction to act honestly toward each other and to not mislead or withhold critical information from one another. The doctrine of utmost good faith applies to many common financial transactions.

Also know in its Latin form as "uberrimae fidei".

In the insurance market, the doctrine of utmost good faith requires that the party seeking insurance discloses all relevant personal information. For example, if you are applying for life insurance, you are required to disclose any previous health problems you may have had. Likewise, the insurance agent selling you the coverage must disclose the critical information you need to know about your contract and its terms.

Source: Investopedia

Caveat Emptor

What Does Caveat Emptor Mean?
A Latin phrase for "let the buyer beware." The term is primarily used in real property transactions. Essentially it proclaims that the buyer must perform their due diligence when purchasing an item or service.

In other words, consumers need to know their rights and be vigilant in avoiding scams. For example in the private purchase of a used car, caveat emptor places an onus on the buyer to make sure the car is worth the purchase price. This is because once the transaction is complete the buyer will not receive a warranty or return option from the seller.

Source: Investopedia

Salad Oil Scandal

What Does Salad Oil Scandal Mean?
One of the worst corporate scandals of its time. It occurred when Allied Crude Vegetable Oil Company discovered that banks would make loans secured by its salad oil inventory.

When the ships full of salad oil would arrive in the docks, inspectors would test it and confirm that the ship was full of salad oil. However, the company didn't remind anyone that oil floats on water. They had filled salad oil tanks with water and put a few feet of oil on top, fooling everyone. The company would even transfer oil to different tanks while taking inspectors out to lunch. In 1963, the scam was busted and over $175 million worth of salad oil was missing.

American Express took one of the biggest hits from the scandal, losing nearly $58 million and experiencing a 50% drop in AMEX stock as a result.

Source: Investopedia

Leprechaun Leader

What Does Leprechaun Leader Mean?

A corporate manager or an executive who, like the fabled Irish elf, is a mischievous and elusive creature said to possess buried treasures of money and gold.

Also spelled "Lepre-con Leader".

According to Irish folklore, the location of hidden treasure is revealed only when the leprechaun is caught. In the case of a leprechaun leader, the "buried treasure" is not usually buried, but protected in an offshore account!

Examples of leprechaun leaders are the executives of Enron, who stowed away millions of dollars until they were finally caught.

Source: Investopedia