In a transaction such as a business one, one party occasionally has greater material knowledge than the other(s). This is known as asymmetric information.
Moral hazard occurs when one party (normally the one holding more knowledge) is intentionally misleading or changes their behavior after reaching an agreement based on asymmetric information, taking advantage of their greater knowledge.
Adverse selection happens when buyers and sellers have different information or knowledge about the product, service or market. This unfairly benefits one side at the expense of the other, or allows selective participation.