Business Praxis 2 5101: Law and International Business

Municipal Courts

A city court, usually divided into traffic and criminal divisions.

International Trade Benefits

A company has a new market to sell. It can increase its sales and tremendously profit by reaching customers. Company may have surplus supply. Customer can enjoy product that are not available domestically.Products can be sold for less money, at a cheaper price to become more competitive. Less dependency on a single market, if something goes wrong, the item will still be available.

Truth in Lending Act (TILA)

A federal law requiring lenders to provide residential loan applicants with estimates of the total finance charges and the annual percentage rate (APR).

Fair Debt Collection Practices Act (FDCPA)

A federal law, enacted in 1978, that regulates debt collection activities.A federal law that protects debtors from unfair methods and practices by collection agents.

Contracting Manufacturing

A foreign company produces private-label goods to which a domestic company then attaches its own brand name or trademark. A form of outsourcing. A popular method of entering a foreign market.

Federal Trade Commission

A national agency that protects consumers by taking complaints about unfair practices and stopping forbidden acts such as anti-competitive mergers.

General Agreement on Tariffs and Trade (GATT)

A treaty was formed after World War II to help the economy. An international trade agreement that has taken bold steps to lower tariffs and promote free trade worldwide. WTO took over in 1995.

Consumer Product Safety Improvement Act

Address safety in toys, chemicals in products, and more. The government tests products, makes safety standards, and bans products its deem unsafe.

North American Free Trade Agreement (NAFTA)

Agreement that was signed by the United States, Mexico, and Canada. Agreement that created a free-trade area among the United States, Canada, and Mexico.

World Trade Organization (WTO)

An International organization related to trade rules between different countries. a trade organization that replaced the old General Agreement on Tariffs and Trade (GATT).

Strategic Alliances

An agreement among two or more independent firms to cooperate for the purpose of achieving common goals such as a competitive advantage or customer value creation. They work together on a project, but the firms remain independent.

Trade Deficit

An imbalance in international trade in which the value of imports exceeds the value of exports.

Constitutional Law

Based on the Constitution and on Supreme Court decisions interpreting the Constitution. Refers to how the United States Constitution is interpreted and implemented.

International Trade Drawbacks

Can lead to job losses and company failures domestically. It will be challenging for domestic companies to catch up with foreign companies. Concerns about working conditions; some countries has little regulations, people may work in unsafe and unsanitary conditions. Children, workers are working countless hours for little pay. Product may be of lower quality or even hazardous when jobs are outsourced. A company may also face barriers to trade such as tariffs, quotas, and cultural resistance. Domestic companies that have good practices and fairly compensated employees may have difficulty competing with international companies that do not.

Stereotyping

Can occur in which people believe certain things about a person just because of who they are.

Court of General Jurisdiction

Circuit Court, Superior Courts or Courts of Common Pleas. These are specialize courts in many states. Including family courts and juvenile courts. More serious cases, such as those with more serious crimes or higher stakes civil cases.

Currency

Coins and paper bills used as money. When a country purchases items from another country, they first change their money over to that ____________.

Federal Warranty Laws

Covers written and implied warranties.

Labor Laws

Deals with many aspects of the relationship between employer and employee such as working conditions, wages, and discrimination.

Benefit of a weak dollar

Foreign goods cost less, so importing may increase while exporting or domestically-produced items go down. Prices can go down as well.

Federal Court System

Generally divided into circuits and districts, with at least one per state. Many Federal lawsuits are heard in those.

Benefit and drawbacks of a weak dollar

If the dollar is weak, it has less purchasing power and it becomes more expensive to import fro foreign countries. As prices increase. consumers spend less. Fuel costs tend to go up. Inflation can occur because of this. Central banks might raise interest rates to attract investors. A benefit of a weak dollar is that a trade deficit could decrease and domestic job growth can occur, especially in industries like manufacturing.

Civil Law

Laws dealing with private rights of individuals (defamation, breach of contract, negligence). Violation results in damages or injunction. A dispute between two parties.

Conducting International Business through Licensing

Licensing occurs when one business makes an agreement with another, giving special permission to make the product in a foreign country. It might involve the resources to do it or the right. This might include a copyright, skills of managers, patents, technology and more.

State Trial Court

May consist of county courts, circuit courts, and city or municipal courts.

Trial Courts

May have limited jurisdiction, hearing lower criminal charges, cases involving juveniles, traffic issues, and some civil cases.

Lawsuits

Occurs when one party brings a case against another party in a court of law. Cases in which a court is asked to settle a dispute

Insider Trading

Occurs when someone makes a trade while having "insider" information that makes it unfair to other investors.

Public Company Accounting Oversight Board (PCAOB)

Oversees auditing professionals. The five-member body created by the Sarbanes-Oxley Act that was given the authority to set auditing standards in the United States.

Security and Exchange Commission (SEC)

Plays a large role in protecting investors, and mantaining the integrity of the market, and aiding in the formatting of capital. Serve as a govt watchdog over the nations stock markets.

International Monetary Find (IMF)

Promotes economic stability in 188 member countries. It strives for international growth by giving advice in policies. It also helps developing nations reduce the level of poverty. It works to keep exchange rates stable and international trade balance. It provides financing to countries having difficulty and gives training and technical assistance.

Federal Trade Commission (FTC)

Protects consumers by stopping businesses from performing deceptive , unfair, and anti-competitive practices. It strives to stop fraud and other types of deception and keep competition fair by stopping anti- competitive mergers. It helps make policies and shares information with the legislature and government agencies. When wrongdoing is suspected, they will investigate and, at times, sue to stop it. They accept complaints about businesses regarding many matters including identity theft, deceptive advertising, and data security.

Court System

Provides justice and settles disputes

Quotas

Put a restriction on the number of imports. limitations on the amount of specific products that may be imported from certain countries during a given time period

Damages

Refer to the money that may be given to the pliantiff from the defendant during a lawsuit.

Liability

Refers to a party's legal responsibility for behaviors, actions, or inaction. If someone does not meet his or her duty, they could have a lawsuit brought against them.

Due Process

Refers to a person's right to have the state respect his legal rights. It is about providing fairness to those involved in legal matters such as by providing a notice of rights. The government must act fairly and in accord with established rules in all that it does(law) the administration of justice according to established rules and principles.

Burden of Proof

Refers to the prosecutor needing to show that the defendant is guilty "beyond a reasonable doubt."

Fair Packaging and Labeling Act (FPLA)

Requires commodity producers to label the name of the product, the identity and source of the manufacturer, the distributor or packer, and the net quantity. It strives to help consumers understand what they are getting.

Food an Drug Administrative (FDA)

Requires testing on drugs to ensure their safety and efficacy.

Sarbanes- Oxley Act and Bankruptcy Reform Act of 2005

Signed by President George W. Bush in 2002 and increased corporate responsibility and financial disclosure while fighting accounting and corporate fraud. It included new or improved standards for management firms, public accounting firms, and United States public company boards.

Tariffs

Taxes on imported goods. The cost of imports is increased. Domestic production is cheaper.

Comparative Advantages

The ability of a country to produce a good at a lower cost than another country can.

Fair Credit Reporting Act (FCRA)

U.S act that protects privacy of background information and ensures that information supplied is accurate. Federal law giving consumers the right to view and correct their credit information.

Case Law

Verdicts of courts that can now be used in new court cases to help plead cases and define the law.

Negligence

When a party does not show a reasonable amount of care. One can be liable for this. Failure to take proper care in doing something

Class Action Law

When all members of a group of persons who have suffered the same or similar injury join together in a single lawsuit against the alleged wrongdoer. The group must be so numerous that it is impracticable to bring all members before the court individually.

Conducting International Business through Franchising

When an individual leases the ability to replicate a business model and brand. Generally, the individual will create a business that is a replica of a successful one. For an example: franchising a restaurant (McDonald)

World Bank

Works to reduce poverty by loaning money to developing countries for capital programs. This international financial organization is part of the United Nations. It promotes foreign investment, international trade, and capital investment. It also works to improve health and fight diseases such as AIDS, tuberculosis, and malaria by sending baccines internationally and other measures.

Foreign Subsidary

a company owned in a foreign country by another company, called the parent company. When a company opens a new subsidiary in a foreign country, either by starting one or buying an existing company.

Embargoes

a complete ban on the import or export of certain products. Occurs when a country restricts trade with a specific foreign country. It is often for political or economic reasons.

County Courts

a court that hears both civil and criminal cases involving less serious crimes or minor issues for one specific county.

Food and Drug Administration (FDA)

a federal agency responsible for regulating food and drug products sold to the public

Plaintiff

a person who brings a case against another in a court of law.

Criminal Law

a system of law concerned with the punishment of those who commit crimes. Laws dealing with offenses against society (murder, rape, arson). Prosecuted by the government, violation results in fines or prison sentences Codes of behavior related to the protection of property and individual safety.

Defendant

an individual or group being sued or charged with a crime.

US Department of Health and Human Services

and FDA plays a large part in protecting consumers by overseeing the safety of food, drugs, and medical devices. They require extensive testing on drugs to ensure both efficacy and safety

Consumer Product Safety Act (1972)

encourage safety in product design and better quality control.

United States Department of Agriculture (USDA)

enforces standards for the quality and wholesomeness of meat, poultry, and eggs. Inspects and sets standards for meat, poultry, and canned fruits and vegetables.

Statutory Laws

laws passed by a state or the federal legislature.

International Trade

occurs when a firm exports goods or services to consumers in another country

Conflict of Interest

occurs when a person has two adversary interests, one of which might not be best for his or her business.

Food Safety and Inspection Service (FSIS)

oversees the safety of meat and poultry. The public health agency in the U.S. Department of Agriculture responsible for ensuring that the nation's commercial supply of meat, poultry, and egg products is safe, wholesome, and correctly labeled and packaged.

Administrative Laws

rules and regulations created by administrative agencies to which legislative powers have been given by legislatures. It refers to the procedure that administrative agencies create. It is very tecnhical. Different agencies have different procedures and these must be fulfilled before a lawsuit can be brought.

Laws

rules of behavior established by a political authority and backed by state power.

Entity

something that has a real or independent existence

Compensation

something, typically money, awarded to someone as a recompense for loss, injury, or suffering.

Absolute Advantage

the ability to produce a good using fewer inputs than another producer. For instances, if one country can make 10 shirts for the cost and effort that another country uses to make 5 shirts, then the country that can make more has the ____________.

International Business

the buying, selling, and trading of goods and services across national boundaries.

Balances of Trade

the difference in value between a nation's exports and its imports.

Supreme Court

the highest federal in the United States, which shapes many laws. It hears a small number of very important cases.

Circuit Courts

the major trial courts in the state that handle felonies.

Opportunity Cost

the most desirable alternative given up as the result of a decision. The loss of potential gain from other alternatives when one alternative is chosen. What a producer gives up by choosing different options. Example: If a producer can make a dozen cookies in an hour or a dozen brownies in an hour for the same cost and he chooses to make the cookies, then the dozen brownies are the ___________.

Ethnocentrism

the practice of judging another culture by the standards of one's own culture.The belief that one's own group or culture is superior to all other groups or cultures. Racial or cultural prejudice.

Exchange Rates

the prices at which currencies trade

Commodity

valuable product; a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.

Consumer Protection Laws

variety of laws and goverment agencies protect the public against harmful products.

Voluntary Export Restraints

voluntarily imposed limits on the number or volume of products exported to a particular country. Self-applied rules that restrict what a country can export to another country.

Bankruptcy Reform Act of 2005

was created to lower Bankruptcy Code filing. Parties filing for bankruptcy would now need to get financial counseling first. In addition, undergo a "means test" to see if they qualified. Filers have to wait 8 years before using Chapter 7 bankruptcy again.

Joint Ventures

when two or more companies join forces - sharing resources, risks, and profits, but not actually merging companies - to pursue specific opportunities. The company may form an actual business entity together.