The Legal Environment of Business Chapter 10 Chase Edwards Fall 2021

Bulbous Cordials, Inc., a U.S. firm, enters into an agreement with Columbiana Cacao, S.A., a South American firm, to fix the price of dark chocolate in the U.S. market. If the agreement is a per se violation of U.S. antitrust laws, a U.S. court could exercise jurisdiction over a. Bulbous Cordials and Columbiana Cacao. b. Bulbous Cordials only. c. Columbiana Cacao only. d. neither Bulbous Cordials nor Columbiana Cacao.

Bulbous Cordials and Columbiana Cacao

Vieux Carré S.A., a French firm, imports its goods into the United States and offers those goods for sale at "less than fair value." "Fair value" is the price of a. comparable goods in a select "basket" of other countries. b. Vieux Carré's goods in France. c. Vieux Carré's goods in the United States. d. Vieux Carré's goods on the world market.

Vieux Carré's goods in France

Canada and the United States form an agreement to govern their commercial exchanges with one another. This is a. a bilateral agreement. b. a lateral agreement. c. a multilateral agreement. d. a unilateral agreement.

a bilateral agreement

Wytex, Inc., a U.S. firm, and Findora Commercial, a Nigerian firm, are parties to a contract that specifies that the official language of the contract is English. This is a. a choice-of-forum clause. b. a choice-of-language clause. c. a choice-of-law clause. d. an arbitration clause.

a choice-of-language clause

Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd., a Canadian firm, to give Pharma the right to sell Optima's products in Canada. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

a distribution agreement

The government of Japan sets a limit on the amount of rice that can be imported from the United States. This is a. a dumping duty. b. an antidumping duty. c. a quota. d. a tariff.

a quota

The United States taxes each barrel of imported oil at a flat rate. This is a. an antidumping duty. b. a dumping duty. c. a quota. d. a tariff.

a tariff

Sam, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity for a. a tort allegedly committed in the United States only. b. a tort allegedly committed in the United States or overseas. c. a tort allegedly committed overseas only. d. no purpose.

a tort allegedly committed in the United States or overseas

The U.S. corporation Fun Toys, Inc. sets up a firm in China. The parent company remains in the United States and retains complete ownership of the China branch as well as complete authority and control over all phases of the operation. This is a. a distribution agreement. b. a wholly owned subsidiary. c. a joint venture. d. direct exporting.

a wholly owned subsidiary

Quality Energy Company, a U.S. firm, and Royal Petro, a Dutch firm, en¬ter into a contract that includes an arbitration clause. This clause must provide that the arbitrator will be a. any specified third party. b. the American Arbitration Association. c. the Dutch Arbitration Organization. d. the International Chamber of Commerce.

any specified third party

Qang and other foreign citizens allege human rights violations committed overseas by the government of Burma on behalf of Railway Construction Company, a U.S. firm. To seek redress for their injuries in a U.S. court, these citizens can a. allege antitrust injuries under the Sherman Act. b. bring civil suits under the Alien Tort Claims Act. c. file criminal complaints under Title VII of the Civil Rights Act. d. do nothing.

bring civil suits under the Alien Tort Claims Act

Mountain Mining Company, a U.S. firm, owns property in Bolivia. The government of Bolivia seizes the property for an illegal purpose without paying just compensation. This is a. confiscation. b. defalcation. c. dumping. d. expropriation.

confiscation

The basis for India to give effect to the laws and court decisions of the United States is primarily a. courtesy and respect. b. fear and intimidation. c. admiration and envy. d. payments of cash and exchanges of property.

courtesy and respect

WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an Argentinean firm, for a shipment and payment for WiFi's goods. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

direct exporting

Call Center Corporation, a U.S. firm, owns property in India. The government of India seizes the property for a proper public purpose and pays Call Center just compensation. This is a. confiscation. b. defalcation. c. dumping. d. expropriation.

expropriation

Bango! Business, Inc., a U.S. firm, may have committed, in Chile, acts that would constitute, in the United States, violations of U.S. anti¬trust laws. These laws apply a. extraterritorially. b. only to signatories of the North American Free Trade Agreement. c. only to members of the World Trade Organization. d. only within U.S. borders.

extraterritorially

Miranda is a U.S. citizen working in Europe for Tourist Vacations, Inc., a U.S. travel agency. Tourist fires Miranda for reasons that she believes violate U.S. antidiscrimination laws. Those laws apply a. extraterritorially. b. only to signatories of the North American Free Trade Agreement. c. only to members of the World Trade Organization. d. only within U.S. borders.

extraterritorially

T/F A tariff is always a flat rate per unit.

false

T/F According to the Foreign Sovereign Immunities Act, a foreign state that has committed a tort in the United States is protected from the jurisdiction of the U.S. courts.

false

T/F Dumping is the exporting of environmentally polluting goods to a foreign market.

false

T/F Force majeure clauses in international business contracts commonly set forth the major clauses of the contracts.

false

T/F Generally, a foreign government cannot sue under U.S. antitrust laws in U.S. courts.

false

T/F In a joint venture, the parent company in the United States retains complete ownership and authority over all phases of the operation.

false

T/F International franchisees usually do not pay fees for the license to use a trademark or trade name.

false

T/F International law is a body of law that governs relations between and among citizens, not countries.

false

T/F Quotas are limits on the amounts of goods that can be exported.

false

T/F Tariffs are imposed only on exports.

false

T/F The act of state doctrine does not have important consequences for firms doing business in other countries.

false

T/F The act of state doctrine provides that the executive branch of one country will not examine the validity of public acts committed by a recognized foreign government within its own territory.

false

T/F The chief aim of the World Trade Organization and other trade agreements is to maximize trade barriers among their members.

false

T/F The doctrine of sovereign immunity cannot immunize a foreign nation from the jurisdiction of U.S. courts.

false

T/F Under the principle of comity, all foreign governments are subject to all U.S. laws.

false

T/F When a U.S. firm wishes to increase its involvement in an international market, it normally establishes an agency relationship with a foreign firm.

false

Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of these parties, a court in Portugal resolves a dispute between them. A U.S. court will most likely honor the judgment a. if it is consistent with U.S. laws and public policy. b. if it is consistent with Portuguese laws and public policy. c. if it does not benefit the U.S. to deny it. d. under no circumstances.

if it is consistent with U.S. laws and public policy

Two Japanese firms—Mikato, Ltd., and Shuzushi, Ltd.—enter into a joint venture in an attempt to in¬crease their market share of the U.S. auto market. If the joint venture is not a per se violation of U.S. antitrust laws, a U.S. court could ex¬ercise jurisdiction over the firms a. if the joint venture has a substantial effect on U.S. commerce. b. if the joint venture has any effect on U.S. commerce. c. if the joint venture was entered into in the United States. d. under no circumstances.

if the joint venture has a substantial effect on U.S. commerce

Wrugged Woolens, Inc., a U.S. corporation, sets up a specialized marketing organization in Scotland by appointing a foreign agent. This is called a. direct exporting. b. indirect exporting. c. a joint venture. d. piracy.

indirect exporting

KO Marketing Company, a U.S. firm, signs a contract with Librador Corporacion, a Chilean firm, to give Librador the right to use Innovative's animation techniques and characters in product promotions. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

licensing

Telfonix Corporation, a U.S. firm, and Adex, Inc., a British firm, are parties to a contract with a forum-selection clause. The forum specified in the clause a. must be within the geographic boundaries of the United States. b. must be within the geographic boundaries of Britain. c. need not be within the geographic boundaries of either party. d. must be within the geographic boundaries of either the United States or Britain.

need not be within the geographic boundaries of either party

Secure Investments, Inc., a U.S. firm, expands into international markets through a joint venture. In this situation, Secure owns a. all of the operation, and its profits and liabilities. b. all of the operation, and none of its profits and liabilities. c. none of the operation, and none of its profits and liabilities. d. part of the operation, and shares its profits and liabilities.

part of the operation, and shares its profits and liabilities

Soleful Shoes, Inc. owns property in Somalia. The Somalian government seizes the property. In order for the seizure to be considered an expropriation and not a confiscation, the Somalian government must a. pay just compensation to Soleful Shoes. b. give Soleful Shoes at least thirty days notice of the seizure. c. give Soleful Shoes at least ninety days notice of the seizure. d. notify the U.S. government before the seizure.

pay just compensation to Soleful Shoes

Senator Brown and other politicians want to restrict the flow of technologically advanced products and data from the United States to other countries. To restrict or encourage exports, Congress can a. do nothing. b. assess antidumping duties. c. impose export taxes. d. set export quotas.

set export quotas

In some cases, foreign states are not immune from the jurisdiction of U.S. courts. These circumstances are governed by a. the Uniform Commercial Code. b. the Foreign Sovereign Immunities Act. c. the European Union. d. the North American Free Trade Agreement.

the Foreign Sovereign Immunities Act

Metallic Metals, Inc., a U.S. firm, files a suit against a Venezuela government agency. The agency has committed a tort in the United States. Under the Foreign Sovereign Immunities Act a. the Venezuelan government agency is not immune from the jurisdiction of the U.S. courts. b. the Venezuelan government agency is immune from the jurisdiction of the U.S. courts. c. Metallic Metals cannot bring a suit against the Venezuelan agency. d. Metallic Metals must file suit in Venezuela.

the Venezuelan government agency is not immune from the jurisdiction of the U.S. courts

The United States and other members of a certain organization agree to grant normal trade relations status to each other with regard to imports and exports. This organization is a. the Convention on Contracts for the International Sale of Goods. b. the International Export-Import Bank. c. the United Nations. d. the World Trade Organization.

the World Trade Organization

Sudan seizes the assets of Triage Medical, Inc., a U.S. firm. Triage's recovery from Sudan in a U.S. court may be prevented by a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the Foreign Corrupt Practices Act. d. the principle of comity.

the act of state doctrine

UniOil, a U.S. firm, owns property in Venezuela. When the government of Venezuela seizes the property, UniOil asks a U.S. court to order the property's return. The court rules that Venezuela is exempt from the court's jurisdiction. This is a. a travesty of justice. b. the act of state doctrine. c. the doctrine of sovereign immunity. d. the principle of comity.

the doctrine of sovereign immunity

US Cars, a U.S. firm, owns property in Argentina. The government of Argentina seizes the property. US Cars claims that this is confiscation. The government of Argentina claims that it is expropriation. The burden of proof lies with a. the U.S. government. b. the government of Argentina. c. US Cars. d. the U.S. Supreme Court.

the government of Argentina

Suisse Internationale, a Swiss maker of athletic equipment, enters into a price fixing agreement with Total World Sports, a U.S. wholesaler of Suisse's products. U.S. courts will apply U.S. antitrust laws if a. the agreement was made in Switzerland. b. the agreement was made in the United States. c. the price fixing has a substantial effect on U.S. commerce. d. the Swiss government agrees to be sued in the United States.

the price fixing has a substantial effect on U.S. commerce

Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and enforces the Irish court's decree. This is a. a travesty of justice. b. the act of state doctrine. c. the doctrine of sovereign immunity. d. the principle of comity.

the principle of comity

Premier Clothing, Inc., a U.S. firm, obtains a judgment in a U.S. court against Quang Tri, Ltd., a Vietnamese business. Whether the court's judgment will be enforced by a court in Vietnam depends on the Vietnamese court's application of a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the principle of comity. d. the World Trade Organization.

the principle of comity

T/F A U.S. citizen can bring a civil suit in a U.S. court against a U.S. entity for a tort allegedly committed overseas.

true

T/F A party to a licensing agreement generally agrees to pay royalties on some basis.

true

T/F According to the Foreign Sovereign Immunities Act, a foreign state that waived its immunity by implication is subject to the jurisdiction of the U.S. courts.

true

T/F All international sales contracts should have a choice-of-language clause to designate the official language by which the contract will be interpreted.

true

T/F Any conspiracy that has a substantial effect on U.S. commerce is within the reach of the U.S. antitrust laws.

true

T/F Confiscation occurs when a government seizes private property for an illegal purpose or without just compensation.

true

T/F Dumping is the sale of imported goods at "less than fair value."

true

T/F Expropriation occurs when a government seizes private property for a proper purpose and awards just compensation.

true

T/F Foreign exchange markets comprise a worldwide system for buying and selling currency.

true

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

true

T/F Restrictions on imports may include prohibitions.

true

T/F Restrictions on imports may include quotas.

true

T/F The Foreign Sovereign Immunities Act spells out what a "foreign state" includes.

true

T/F The chief aim of the European Union and other trade organizations is to minimize trade barriers among their members.

true

T/F The primary goal of the North American Free Trade Agreement is to eliminate tariffs among the United States, Canada, and Mexico.

true

T/F The simplest way for a U.S. firm to do business in a foreign market is to export its products directly to that market.

true

T/F U.S. laws that prohibit discrimination in employment apply to U.S. em¬ployees working for U.S. firms located abroad.

true

T/F Under the Foreign Sovereign Immunities Act, a foreign state can be a political subdivision of a foreign state.

true

T/F Under the principle of comity, one nation may defer and give effect to the laws and judicial decrees of another country.

true

Real World Sports Corporation (RWSC) is a U.S. firm with a workplace in Switzerland. Generally, RWSC must abide by U.S. anti-discrimination laws in Switzerland a. under any circumstances. b. under no circumstances. c. unless to do so would contravene the cultural norms of Switzerland. d. unless to do so would violate the law of Switzerland.

unless to do so would violate the law of Switzerland