Business Law - Chapter 3

__________ legal systems appeal to countries whose political systems demand _____________ rather than a focus on individual rights.

Statute-based strong central authority

Excise tax

Taxes levied on the purchase of cigarettes

Bingwen, a Chinese electronics exporter, sues Arlene, a Mississippi importer, claiming that Arlene owes Bingwen $1 million for watches. What law will be used to resolve the dispute?

The CISG will apply unless both parties specifically opt out.

Selecta Motor, a U.S. company wins a large judgment in an Ecuadorian court against Loja Tire, an Ecuadorian company. But Loja refuses to pay Selecta. If the U.S. refuses to recognize and enforce the judgment, it is most likely because:

The Ecuadorian court did not have proper jurisdiction over the dispute.

The world's largest global business organization is

The ICC The International Chamber of Commerce

In the U.S., most states have adopted the Uniform Foreign Money Judgments Recognition Acts. This act provides that U.S. courts will recognize foreign judgments if several criteria are met. Which of the following are the appropriate terms?

The foreign court was the proper forum to hear the case The judgment was not fraudulent or against public policy The award was based on a full and fair trial by an impartial tribunal with proper jurisdiction The defendant was given notice and an opportunity to appear

Jean-François, a French wine exporter, sues Bob Joe, a New York importer, claiming that Bob Joe owes him $2 million for wine. Jean-François takes the witness stand to describe how the contract was created. Where is the trial taking place?

The location designated in the contract.

U.S. courts can apply foreign law to resolve disputes.

True

What determines Islamic law is the judge's ijtihad.

True

Darnell is a beach ball manufacturer whose company is based in Rowayton, Connecticut. He gets into a dispute with Mary, the owner of a novelty store in Barbados, about a sales contract and Mary suggests arbitrating the dispute in her hometown. Darnell is intrigued, but wants to make sure that their chosen method of dispute resolution is relatively inexpensive and enforceable once he is back in the United States. Is arbitration a good choice for Darnell?

Yes. Arbitration is likely to be cheaper than litigation and also enforceable in the U.S.

enters into force

a treaty enters into force when it becomes legally binding on its signatories

ratified

a treaty is said to be ratified when a nation indicates its intent to be bound by it

convention

a treaty on a specific issue that affects all the participants

NAFTA is an example of

an RTA

Civil law relies on

an inquisitorial process of dispute resolution

International law

has no single source of law or enforcement mechanism

adopted

A treaty is said to be adopted when those who have drafted it agree that it is in final form

Which of the following are common advantages to arbitrating a dispute?

Cost Greater privacy Speed It is less political than foreign courts

National treatment

Countries may not discriminate against foreign goods by imposing additional taxes that do not apply to domestic goods

Most favored nation

Countries must treat all other WTO members equally

In August 2014, President Barack Obama stated that the previous administration "tortured some folks" in the aftermath of the attacks on September 11, 2001. What organizations and/or laws prohibit torture?

Jus cogens and the Geneva Conventions

Oregon Olive is a U.S. company that manufactures and distributes several varieties of olive oil. The majority of Oregon Olive's sales are in the U.S. but it also exports its goods to several foreign countries, all of which are WTO signatories. Oregon Olive executives are outraged to learn that when their olive oil is sold in Italy, it is subject to a tax that is four times as high as that imposed on the olive oil produced in that country. Which principle (if any) does Italy's tax violate?

National treatment

In litigating Forestal Guarani S.A. v. Daros International, Inc., Forestal incurred huge expenses traveling to the U.S. simply to determine which law governed the contract. The parties could have avoided this dispute if they had

included a provision in the contract stating which country's law would control

"FOB" is an example of

incoterm rules

multilateral treaty

involves three or more countries

The UN's General Assembly

is composed of all its member nations, which propose and vote on resolutions

A major distinction between common law and civil law is the role the judge plays in a dispute. In common law, the judge ____________, weighs heavily the __________ of lawyers, and the judge bases his decision on ___________________. Under civil law, the judge _____________________, weighs heavily the ______________ from lawyers, and the judge bases his decision on _______________.

is impartial oral arguments the doctrine of stare decisis acts as interrogator and investigator written submissions codes and statutes

Sovereignty means that

each government has the absolute authority to rule its people and its territory

How many countries are members of the United Nations

193

Roughly what percent of the world is governed by legal systems very different from our own?

85

Non-tariff barriers

A quota on the amount of corn that can be imported

Customs duties

A tax imposed on bananas when they enter the country

Private International Law

A business in an international commercial transactions An individual in an international legal transaction

Public International Law

A country's acquisition of territory Rules governing shared resources like space and the oceans The treatment of refugees

A treaty is:

An international agreement governed by international law; in the U.S., the president has the power to make treaties.

Omicron Corp, a U.S. company, files suit in Delaware against Athena, Inc., a Greek commercial shipping company. Athena argues that the Delaware court lacks jurisdiction because the Greek government owns Athena, Inc. and therefore the company is protected under FSIA. Which of the following arguments is most likely to help Omicron?

Athena, Inc. is not protected under FSIA because Athena, Inc. is engaging in commercial activity.

World Bank

End poverty by encouraging development; loan money to the poorest countries on favorable terms

The main principle of civil law is that the law is found primarily in ____________.

England

What are the first goals of the EU

Establish tariffs for external countries Coordinate its agricultural and fishing policies Permit the free movement of EU citizens within its territory Eliminate trade barriers among member nations

Today, courts recognize a custom as binding international law if:

It is longstanding It is widespread and widely-accepted Nations follow it out of a sense of obligation to each other

Islamic law relies heavily on binding precedent.

False

The ICC makes law

False

The Secretariat is the UN body charged with maintaining international peace.

False

To take effect in the U.S., treaties must be approved by at least two-thirds of the United States Congress.

False

U.S. statutes never apply outside the country.

False

IMF

Foster worldwide economic growth and financial stability

The five permanent members of the UN Security Council are

France Russia China The United Kingdom The United States

Nancy Wheelwright, is a trial judge in a civil court in Baltimore, Maryland. She has been invited to Paris, France to observe trials and draft a memorandum comparing the French and American legal processes. France is subject to civil law. What are some differences or similarities that Judge Wheelwright can anticipate?

French judges will act as interrogators and investigators.

GATT is the

General Agreement on Tariffs and Trade

UNCITRAL

Harmonize international business law by proposing model legislation on topics such as international payments and e-commerce

Leander is starting a business shipping tractors to Thailand, but he has little understanding of the local customs and policies there. He wants to suggest shipping terms for the contract that are clear and uniform, so that he and his Thai counterpart do not have any misunderstandings going forward. Where can Leander turn for instruction on how to draft such a contract?

ICC

The ______ is comprised of 15 ________ judges from _______ countries representing the world's principal ____________________.

ICJ elected 15 legal systems

Common Law

Impartial judge presides over adversarial process Relies on stare decisis Uses a jury Inherited from England

Which legal system prohibits any contract gain that is not clearly outlined at the time of the contract?

Islamic law

Amanda is an American who just started working for a Spanish company at its office in Madrid, Spain. On her third day at work, she is appalled to hear her boss explain to a colleague why he would never promote a woman to the level of vice president. Amanda knows that in the United States this kind of discrimination is barred by the Civil Rights Act of 1964. Does this statute apply to Amanda's Spanish employer in Spain?

No. Amanda will not be able to rely on the statute unless the statute explicitly states that it can be used outside the U.S.

Which of the following are reasons why the ICJ has not been an important force in resolving international business disputes?

Only countries can bring a case before the ICJ The court has no enforcement power The ICJ only has jurisdiction over states that have agreed to be bound by its decisions

Islamic Law

Over 20% of the world lives under this legal system Also known as shari'a Based on the Koran and the teachings of the Prophet Muhammed Does not use binding Precedent

Civil Law

Over 70% of the world's population is subject to this system Law is found primarily in the statute books Inquisitorial process in which judges acts as interrogator and investigator Does not use juries

Economist David Ricardo argued that citizens of the world will benefit overall if each country:

Produces whatever goods it can make most efficiently and then trades them for goods that other countries make more efficiently.

WIPO

Promote the protection of intellectual property: patents, copyrights, trademarks, and industrial design

The Civil code tradition grew out of

Roman Emperor Justinian's Corpus Juris Civilis.

Which of the following describe conduct and entities that are covered by international law

Rules governing outer space Rules governing the sea Disputes between nations Laws of war International businesses

Free trade

The unrestricted purchase and sale of goods and services between countries

A protocol is an amendment to a treaty.

True

As the case entitled, "Measures Affecting the Cross-Border Supply of Gambling and Betting Services" reveals, when one WTO member refuses to comply with a WTO ruling, the injured member can retaliate by suspending its duties under another treaty.

True

International law applies to states, international organizations, businesses, and individuals across borders.

True

bilateral treaty

between two countries - similar to a contract between states

The WTO is empowered to

settle trade disputes between its member states

In Islamic law, judges

study Islamic scholarly writings as guides

Opponents of GATT argue that because of it

the United States now competes against nations with unlimited pools of exploited labor

Exchange rates fluctuate regularly, often creating vast discrepancies between the value of different currencies. Accordingly, anyone entering into an international contract should stipulate

the currency to be used for payment

In Saudi Basic Industries Corporation v. Mobil Yanbu Petrochemical Company, Inc. and Exxon Chemical Arabia, Inc. the court focused on ________________________ as a reason for upholding the lower court's decision.

the extensive research and analysis done by the lower court