intentional misrepresentation of material facts for monetary gain. This type of crime is not dependent on
threats or violence.
3. d
5. The Foreign Corrupt Practices Act prohibits bribery payments by U.S. companies to foreign government
officials with an intent to influence foreign business results. One example of bribery would be a situation in
which a pharmaceutical company offers special benefits to individuals who agree to prescribe their
medications.
7. b
9. d
Chapter 6
1. Torts are wrongs committed against others who suffer some form of damage as a result.
3. d
5. a
7. b
9. a
Chapter 7
1. A contract is defined as an agreement between two or more parties that is enforceable by law.
3. d
5. b
7. d
9. If a person lacks the mental capacity to enter a contract, then either he or she, or his or her legal guardian,
may void it, except in cases where the contract involved necessities. In most states, mental capacity is
measured against the “cognitive standard” of whether the party understood its meaning and effect.
11. A material breach is when something substantially different from what was expected under the terms of
the contract is delivered, the breach is considered material.
13. Rescission terminates the duties of both parties under the contract, while reformation allows courts to
equitably change the contracts substance.
15. Restitution restores the injured party to status quo or the position they had prior to the formation of the
contract, by returning the plaintiff any money or property give pursuant to the contract.
Chapter 8
1. A sales contract is s specific type of contract is which one party is obligated to deliver to deliver and transfer
ownership of a good to a second party, who in turn is obligated to pay for the good in money, or its equivalent.
3. b
5. A shipment contract occurs when it is the responsibility of the seller to make the shipping arrangements and
to transfer the goods to the common carrier. Under this contract, title passes to the buyer at the time of
shipment, so the buyer bears the risk of loss, even when he or she has not taken possession of the goods. A
destination contract occurs when the seller is required to deliver the goods to a location that is stipulated in
the contract. Under this contract, title transfers when the goods are delivered, but the seller bears the risk of
loss until that time.
7. An express warranty is one in which the seller explicitly guarantees the quality of the good or service sold.
Typically, the vendor provides a statement, or other binding document, as part of the sales contract. In certain
circumstances where no express warranty was made, the law implies a warranty. This statement means that
the warranty automatically arises from the fact that a sale was made.
9. d
Chapter 9
1. Compared to other countries in the West, stringent and extensive employee protections came fairly late to
the United States. Up until 1959, for example, employers had the right to fire a worker without giving any
reason. This concept, which was known as at-will employment, was applicable in all states. The concept of at-
will employment does, however, continue today, and all employees are considered to be at-will unless they are
employed under a collective bargaining agreement, or under a contract for a set duration. Employers can still
fire employees for any reason, but they cannot be fired for illegal reasons, as set out in the U.S. or state
constitutions, federal law, state statutes, or public policy. In this section, some of the main employee rights
and company responsibilities will be introduced.
3. a
5. d
Answer Key
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