Business Law ch. 8 - 9

17. Recognize an example of a joint venture?

a. A Joint Venture is a joint undertaking of a specific commercial enterprise by an association of persons. A joint venture is normally not a legal entity and is treated like a partnership for federal income tax purposes. In a joint venture, the U.S. company owns only part of the operation; the rest is owned either by local owners in the foreign country or by another foreign entity.

18. What is licensing?

a. A U.S. firm may license a foreign manufacturing company to use its copyrighted, patented or trademarked intellectual property or trade secrets. This calls for payment of royalties on some basis. Franchising is another form of Licensing.

3. What is a bilateral agreement?

a. A bilateral agreement is an agreement formed by two nations to govern their commercial exchanges or other relations with one another.

4. Recognize an example of rejection of an offer and the making of a counter offer? (2)

a. A counter offer is a rejection of the original offer and the simultaneous making of a new offer.

2. What is multi-lateral agreement?

a. A multi-lateral agreement is formed by several nations to govern their commercial exchanges or other relations with one another.

12. What is a quota?

a. A quota is an assigned import limit on goods

11. What is a tariff?

a. A tariff is a tax on imported goods.

13. What is a unilateral contract?

a. A unilateral contract is a contract that results when an offer can only be accepted by the offeree's performance. "A promise for an act." The time of contract formation in a unilateral contract is not the moment when promises are exchanged but the moment when the contract is performed.

6. What is an agency relationship

a. An agency relationship is a relationship created when a U.S. firm wishes to limit its involvement in an international market. The foreign firm then acts as the U.S. firm's agent and can enter contracts in the foreign location on behalf of the U.S. Company.

10. What is an assignment?

a. An assignment is the act of transferring to another all or part of one's rights arising under a contract. The transfer of contractual rights to a third party.

3. What is an implied contract?

a. An implied contract is a contract formed in whole or in part from the conduct of the parties (as opposed to an express contract). Also know as implied-in-fact contract.

10. What can congress do to restrict or encourage export?

a. Congress can not impose an export tax; however, they can enact quotas on various items. They can also restrict technology flow to other countries. They can also use incentive send subsidies to stimulate exports.

16. When will a court examine the adequacy (value) of consideration?

a. Consideration is broken down into two parts (1) something of legally sufficient value must be given in exchange for the promise, and (2) usually, there must be a bargained-for exchange.

13. What is dumping?

a. Dumping is the selling of goods in a foreign country at a price below the price charged for the same good in the domestic market. The two government agencies that are instrumental in imposing anti dumping duties are the International Trade Commission and the International Trade Administration.

15. What is expropriation?

a. Expropriation is the seizure by a government of privately owned business or personal property for a proper public purpose and with just compensation.

8. Recognize where fraud would void a contract? (2)

a. Fraudulent misrepresentation. It refers only to misrepresentation that is consciously false and is intended to mislead another. They consist of (1) a misrepresentation of a material fact must occur. (2) there must be an intent to deceive. (3) The innocent party must justifiably rely on the misrepresentation. Also duress, agreement to the terms of a contract that is not voluntary if one of the parties is forced into the agreement. The use of threats to force a party to enter into a contract. In addition, blackmail or extorting to induce consent to a contract constitutes duress.

15. Recognize an example of when an acceptance is completed when performance is completed?

a. In a unilateral contract. If the offer is phrased so that the offeree can accept the offer only by completing the contract performance, the contract is a unilateral contract. "Promise for an act. The time of contract formation in a unilateral contract is not the moment when promises are exchanged but the moment when the contract is performed.

19. What will a court consider when looking at whether a contract is unconscionable?

a. In certain circumstances, however, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties. They are deemed unconscionable because they are so unscrupulous or grossly unfair as to be "void of conscience."

7. What is direct exporting?

a. In direct exporting, a U.S. company signs a sales contract with a foreign purchaser that provides for the conditions of shipment and payment for the goods.

8. What is indirect exporting?

a. Indirect exporting is when sufficient business develops is a foreign country a U.S. company may establish a specialized marketing organization there by appointing a foreign agent or a foreign distributor.

1. What is the importance of intent in a contract?

a. Intent is of prime importance. In contract law, intent is determined by what is called the objective theory of contracts. Not by the personal or subjective intent, or belief, of a party. The theory is that a party's intention to enter into a legally binding agreement, or contract, is judged by outward, objective facts as interpreted by a reasonable person, rather than by the party's own secret, subjective intentions. Objective facts include (1) what the party said when entering into the contract. (2) how the party acted or appeared (intent may be manifested by conduct as well as by oral or written words), and (3) the circumstances surrounding the transaction.

20. What is the function of the World Trade Organization (WTO)?

a. It is the Trade organization that has most of the world's leading trading nations as members. It was established in 1995 to minimize trade barriers among nations. The members are required to grant normal trade relations to other member counties. This means that each member is obligated to treat other members at least as well as it treats the country that receives its most favorable treatment with regard to imports or exports.

20. Recognize an example of rescinding a contract on the basis of mistake?

a. Only a mistake of fact makes a contract voidable. "a mutual misunderstanding concerning a basic assumption on which the contract was made".

11. Recognize an example of a contract that must be in writing to be enforceable? (3)

a. Statue of Frauds. It denies enforceability to certain contracts that do not comply with its requirements. These require writing (1) Contracts involving interests in land. (2) Contracts that cannot by their terms are performed within one year from the day after the date of formation. (3) Collateral, or secondary, contracts, such as promises to answer for the debt or duty of another and promises by the administrator or executor of an estate to pay a debt of the estate personally- that is, out of his or her own pocket. (4) Promises made in consideration of marriage. (5) Under the UCC, contracts for the sale of goods priced at $500 or more.

9. What is the purpose of the statue of frauds?

a. Statute of Frauds is a state statute under which certain types of contracts must be in writing to be enforceable.

14. What is the effect of an invitation to make an offer?

a. That anyone can make an offer on a particular thing however there is no binding of that offer.

5. What is The Act of State Doctrine? (2)

a. The Act of State Doctrine provides that the judicial branch of one county will not examine the validity of public acts committed by a recognized foreign government within the latter's on territory.

14. What is the purpose of the Alien Tort Claims Act?

a. The Alien Tort Claims Act allows even foreign citizens to bring civil suits in U.S. courts for injuries caused by violation of the law of nations or a treaty of the United States.

16. What is the Doctrine of Sovereign Immunity?

a. The doctrine of sovereign immunity exempts foreign nations form the jurisdiction of the U.S. courts. A foreign nation is not immune from jurisdiction of U.S. courts (1) when the foreign state has waived its immunity either explicitly or by implication. (2) when the foreign state has engaged in commercial activity within the U.S or in commercial activity outside the U.S. that has "a direct effect in the U.S." (3) When the foreign state has committed a tort in the United States or has violated certain international laws.

19. What could Congress do about the import of foreign agricultural products that could pose a danger to domestic crops?

a. They prohibit the importation of those crops.

2. Why do business persons normally put their contracts in writing?

a. Typically business persons put their contracts in writing to ensure that there is some proof of a contract's existence should disputes arise.

4. What is Principle of Comity? (3)

a. Under the principle of comity, one nation will defer and give effect to the laws and judicial decrees of another country , as long as they are consistent with the law and public policy of the accommodation nation.

9. What is the legal effect of wholly owned subsidiary? (2)

a. When a wholly owned subsidiary is established, the parent company, which remains in the United States, retains complete ownership of all the facilities in the foreign country, as well as total authority and control over all phases of the operation.

18. What is the effect of an unforeseen difficulty on the validity of a contract?

a. When an honest contractor who has contracted with a landowner to construct a building runs into extraordinary difficulties that were totally unforeseen at the time the contract was formed, the courts sometimes allow exceptions to the preexisting duty rule.

5. Is an acceptance effective when it is sent or received?

a. When the offeree or offeree's agent receives it.

12. What is a third party beneficiary contract?

a. When the original parties to the contract intend at the time of contracting that the contract performance directly benefit a third person. The third person is the third party beneficiary. As an intended beneficiary of the contract, the third party has legal rights and can sue the promisor directly for breach of the contract.

17. Must the consideration always be legally sufficient?

a. Yes. Being legally sufficient in value may consist of (1) a promise to do something that one has no prior legally duty to do, (2) the performance of an action that one is otherwise not obligated to undertake, or (3) the refraining from an action that once has a legal right to undertake.

1. Is there a power to enforce international law within the boarders of all nations?

no

7. Would a contract signed by a patient with an unlicensed doctor enforceable?

no

21. If one of the parties disaffirms a contract must he return the merchandise purchased by the contract?

yes

6. Is acceptance by fax proper when an acceptance is required urgently?

yes