International Business Law

The case of Liechtenstein v. Guatemala decided by the UCJ in 1955 focused on the concept of:

Diplomatic protection.

A plaintiff in a lawsuit in a state court must prove that an individual or corporate defendant sued in the lawsuit has ______ in order to obtain personal jurisdiction over that defendant.

Minimum contacts with the forum state.

An example of a treaty automatically creating legal rights in the courts of a signatory state includes:

Montreal Convention for the Unification of Certain Rules for International Carriage by Air.

Joel is the leader of a criminal gang responsible for robbing over a dozen banks in Italy, killing several policemen, and in general terrorizing communities all over northern Italy. He is finally caught by the police. Can he be prosecuted in the International Criminal Court (ICC)? a. No. b. Yes, since he committed a crime covered by that court located in Rome since a major violation of Italian law. c. Yes, but only if he is not an Italian citizen. d. Yes, without condition or restriction.

No

A nation has clear power over all persons (citizens and non-citizens), places and power within its geographical area, airspace or defined waters. This states the principle of:

Territorial jurisdiction.

In the legal systems of the United Kingdom and United States, the reasoned decisions of judges become the law controlling the case, and the precedent of similar cases is binding on future cases. This is called:

The common law system.

Rules determining the geographic location of a court of competent jurisdiction to hear a case are called ____________________.

Venue

ABC Company has a contract dispute with DEF Company. There was an arbitration clause in their contract. ABC arbitrates their claim, but DEF wins. ABC is very angry, and wants to know if they have to pay the award. Generally speaking, they must do so unless: a. DEF introduced evidence at the arbitration hearing that would not have been allowed in a state court proceeding. b. ABC could have appealed the award if it was a decision by a state court. c. ABC can prove misconduct or fraud by the arbitrator. d. DEF had better lawyers than ABC did.

ABC can prove misconduct or fraud by the arbitrator.

Non-tariff barriers to foreign trade include _______, which are used to quantitatively restrict the number of defined items that can enter into a country: a. an import duty or tax b. quotas c. environmental regulations d. industrial standards

b. quotas

The shipment of goods out of country and the rendering of services to a buyer located in a foreign country is called: a. Licensing b. Importing c. Exporting d. Distribution

c. Exporting

ABC Company owns and manufactures appliances from its plant in Arlington, Virginia. It decides to open a new operation in Chile under Chilean law making appliances and selects William to be its local partner in Chile. William invests 20% of his own money of total startup costs for the Chilean entity, which is called a: a. Wholly-owned subsidiary b. Multinational company c. Joint venture d. Foreign branch

c. Joint venture

ABC Company makes furniture. It seeks to protect itself to the greatest extent possible from the expense and time of litigation by injured users of its product. It will likely place alternate dispute resolution clause on the back of each item of furniture that states injured user-purchasers parties must _____ for any claims for personal injury: a. Arbitrate. b. Assert and prove personal jurisdiction over ABC. c. Negotiate. d. Mediate.

Arbitrate

Nations that agree in writing in advance to submit certain cases to the ICJ are said to have submitted to ______.

Compulsory jurisdiction.

The most important international IP organization fostering government cooperation in developing IP policies and laws and assisting in the resolution of disputes via arbitration is: a. World Intellectual Property Organization b. World Trade Organization c. International Center for Intellectual Property Dispute Resolution d. United Nations

a. World Intellectual Property Organization

alifornia Stove Company (CSC) owns a patent on special technology for making its stoves sold in the United States. CSC decides to license its patented technology to Ecuador United (EU) in that country which also makes appliances. EU will use CSC technology to make the stoves and sell them to customers all over Chile for any price it determines. Under this licensing arrangement, EU pays to CSC an up-front fee of $50,000 for entering into this arrangement. For one year per their license agreement, CSC will receive a 10% royalty on sales revenue generated by EU from sales of its stoves made under the agreement. Over the course of that year, EU sells stoves having a total sales price of $1,000,000 (exclusive of sales taxes) and actually collects $800,000 of that amount from its customers. At the end of the year, EU will have paid CSC in total consideration under their arrangement the amount of: a. $150,000 b. $130,000 c. $1,050,000 d. $105,000

b. $130,000 (800,000 x.10 + 50,000)

Which term below is a type of currency risk related to fluctuations in relative value of two currencies when buyer and seller are in different countries? a. Quotas b. Shipment risk c. Currency controls in seller's country d. Exchange rate risk

d. Exchange rate risk

Which statement below is true? a. An arbitrator makes a final and binding award between the parties. b. An arbitrator helps/facilitates the parties to enter into their own settlement agreement. c. A mediator makes a final and binding award between the parties. d. Parties can never agree to both mediate and arbitrate the same dispute.

An arbitrator makes a final and binding award between the parties.

Personal jurisdiction can be obtained by:

Lawful service of process on defendant.

The New York Convention is signed by 150 nations. It relates to:

The recognition and enforcement by courts of foreign arbitration awards.

A foreign entity organized under the laws of the host state but owned and controlled by the parent corporation in the home country of the investor is a: a. Multinational corporation b. Joint venture c. Foreign subsidiary d. Foreign branch

c. Foreign subsidiary

In an export/import transaction the most common concern of the seller (particularly when not sure of the buyer's organization statutes and stability) is: a. Reputational risk b. Shipment risk c. Supplier risk d. Payment or credit risk

d. Payment or credit risk

Paul operates a vessel in international waters (i.e., in the high seas) off the coast of Texas. It acts as his floating base for illegal drug manufacturing operations, and after the drugs are made he sells his product to other individuals who come to his vessel and buys the drugs for which they will smuggle into the US and sell illegally. Paul is never at any time on US land, or within the US territorial sea or airspace. However, US law enforcement staff arrest him on the vessel. He is prosecuted in a US court on the basis of that court's: a. Protective jurisdiction. b. Territorial jurisdiction based on "effects" inside US of Paul's acts. c. Nationality jurisdiction. d. Universal jurisdiction.

Territorial jurisdiction based on "effects" inside US of Paul's acts.

Texas Shoe Company in Dallas manufactures footwear there. It enters into a two-year contract to sell its boots to Barunia, an Asian nation that uses the boots for its military. The sales price of each pair of boots, as of the June 1, 2016, date of the contract, is fixed for the duration of the contract at 13.00 Baruns which is equal to $10.00 USD at that time. On June 1, 2017 at then current currency exchange rates $10.00 USD equals 15.00 Baruns. As of that date whose economic interests have been most negatively affected by ABC Company agreeing to accept payments in Baruns? a. The parties are affected equally. b. Barunia c. ABC Company d. Neither party is affected at all by the currency fluctuation. It will always impact both parties' economic interests if not resolved in the contract or elsewhere by agreement.

b. Baruina

The Full Faith and Credit Clause of the US Constitution requires:

US courts to recognize the public acts, records and judgments of other US states.

A document prepared by a manufacturer or exporter/shipper attesting to the geographic place (i.e., nation) where goods were made is called a: a. Export license b. Certificate of origin c. Technology transfer license d. Import license

b. Certificate of origin

A written and binding agreement between three or more countries given effect under international law is best described as a(n):

Multilateral treaty.

Venezuela provides a recent example of a host state attempting to restructure its economy by transferring foreign investor assets to itself. This is called: a. Local participation b. Nationalization c. Infringement d. Foreign direct investment

b. Nationalization

Currency controls in a host state may restrict or prohibit the foreign investor from: a. Repatriating profits to any local investor in a host state joint venture. b. Achieving "excess profits" from host state operations as defined by its state law. c. Repatriating profits to home state. d. Using exchange rates to their benefit.

c. Repatriating profits to home state.

A formal request for service of process through diplomatic channels to be accomplished through a foreign court on a defendant in that foreign jurisdiction is called:

Letter rogatory

A US citizen (individual or company) owes a duty to pay income taxes no matter where the income was earned. Which is the basis for exercise of this power to collect such tax by the United States?

Nationality jurisdiction.

Which item below gives federal courts in the United States jurisdiction over civil claims for damages brought by non-US citizens for torts committed against them by other non-citizens outside the US? a. Decisions by the International Court of Justice (ICJ). b. Law merchant. c. United Nations Charter. d. US Alien Tort Statute.

US Alien Tort Statute.

The Foreign Sovereign Immunities Act of 1976 generally prohibits jurisdiction by US courts to hear lawsuits filed against a foreign state unless an exception exists to that principle such as:

Commercial activity

The primary source of customary international law rules for interpretation of treaties is:

Defined in the Vienna Convention on the Law of Treaties

Nigeria is a member of the United Nations. As all members of the UN, it has ratified the Charter of the UN. It has a border despite with Chad that sues Nigeria in the International Court of Justice seeking an adjustment of its borders. Must Nigeria as a member be bound by the future decision of the ICJ in that case? a. No, if it terminates any prior agreement to compulsory jurisdiction. b. Yes. c. No, unless its national legislature has rendered the Charter null and void by abrogation. d. Yes, if it has agreed in advance to compulsory jurisdiction on the subject matter, e.g., border disputes.

No, if it terminates any prior agreement to compulsory jurisdiction.

Company A owns intellectual property (IP) and agrees in writing to let Company B use that property for a specified purpose only. Company A and Company B are (in order): a. Licensee and licensee b. Licensee and licensor c. Franchisor and franchisee d. Licensor and licensee

d. Licensor and licensee

Idaho Battery Inc. (IB) makes millions of batteries for generating power for a variety of small consumer items. All batteries are manufactured in Boise, Idaho. It enters into a contract with Juno of Rome, an Italian company owning many department and equipment stores in Italy, whereby Juno sells the batteries made by Idaho Battery to Juno's many customers at store locations. Which statement below is true about this arrangement? a. Juno is a foreign sales distributor of IB products and does obtain title to the IB product before they are resold. b. Juno exports directly the IB products to its customers in Italy. c. Juno is a foreign distributor of IB products but never actually has title to the batteries it sells on behalf of Idaho to its customers. d. Juno is a foreign sales representative for Idaho Battery.

a. Juno is a foreign sales distributor of IB products and does obtain title to the IB product before they are resold.

John wants to go into business as an international trading company like the famous Japanese trading companies. He wants to bring together several US companies that make sporting goods and export their products to Mexico, with the power to determine which products are sold in what areas in Mexico and the prices to be charged to Mexican buyers. What are special US law uses he may need to be made aware of in his efforts? a. Labor and employment laws in US and how applied to US manufacturing company compliance with those laws. b. If anti-trust law prohibits these activities in Mexico just as US law may do so inside US. c. Foreign direct investment policies. d. Restrictions in US law on nationalization in Mexico.

b. If anti-trust law prohibits these activities in Mexico just as US law may do so inside US.

ABC Company in Memphis makes motorcycles at its plant there. It is considering the benefits of selling its motorcycles in the market of motorcycle riders in Brazil (estimated to be 5,000,000 new potential customers). Which is the LEAST risky way it can enter the Brazilian motor cycle rider market? a. Creating a wholly-owned subsidiary there and constructing a plant for manufacturing. b. Use of foreign sales representative in Rio de Janeiro. c. Entering into a foreign sales distribution agreement with a local owner of stores selling motorcycles. d. Joint venture there to build a large plant with local participation.

c. Entering into a foreign sales distribution agreement with a local owner of stores selling motorcycles.

ABC Company in the US negotiates a contract with Ajax company (Ajax) located in Finland to sell it tractors. Ajax will sell the tractors through its network of stores in Finland. The parties agree that in the event of a dispute, resolution will be in the courts of Germany located in Berlin. There is a dispute and Ajax files its lawsuit in Berlin. What result is most likely? a. ABC will win the case on its merits. b. ABC will likely terminate the forum selection clause as allowed in the contract. c. ABC will object that the forum chosen has no relation to the transaction, and thus the clause is invalid, and the court will likely agree. d. Ajax will be allowed by the court in Berlin to pursue its claim.

ABC will object that the forum chosen has no relation to the transaction, and thus the clause is invalid, and the court will likely agree.

In the famous case involving the Union Carbide plant explosion in Bhopal, India the US federal declined to assert continuing jurisdiction to hear many Indian victims' claims for personal injury or death on the basis of:

Applying the doctrine of forum non conveniens

Choice of law clauses in international business contracts are often used in conjunction with _____________________.

Forum selection clauses.

Ellen and Ann are sisters. Ellen lives in Tarrant County, Texas and Ann lives in Mexico. They inherit a 200-acre tract of land located in Smith County, Texas. There is very confusing language in the Will left behind by their father and each of them now claims they are the sole owner of the land. Ellen files a lawsuit in Smith County, Texas court asking the court to determine title to the land and claims it must determine such based on the law that she is its sole owner. The Texas court will likely assert that it has _______: a. No jurisdiction to hear this case since the parties both live outside Smith County. b. No personal jurisdiction over Ellen. c. No personal jurisdiction over Ann who lives in Mexico. d. In rem jurisdiction to hear this dispute.

In rem jurisdiction to hear this dispute

If you are asked which nations below are NOT a signatory to the Rome Statute of the International Criminal Court, which is your best response? a. Iran. b. United States. c. China. d. None of these three states are signatories.

None of these three states are signatories.

John is a citizen of the US. He enters into a contact with a French catering company called "Amuse Bouche" that caters events. They fail to fulfill their contract obligations to him. He looks for the law giving him a right to get a remedy (i.e., money damages). This dispute on its face appears to be a question of: a. Public international law. b. Private international law. c. Ratification. d. International norms.

Private international law

American Shoe Company (ASC) has a factory in Pakistan. There is an explosion there when a gas line breaks and six Pakistani employees are killed. They file a lawsuit in New York (where the company has its headquarters.) This appears to be a case where the lawyers for the deceased workers are motivated to engage in: a. Forum non conveniens b. Using a forum selection clause c. Forum shipping d. Using diversity of citizenship as a basis for federal court jurisdiction.

Forum shipping

Susan is a US citizen. She owns a 50-acre tract of farmland in Mexico. Mexican law enforcement personnel constantly harass her, threaten to arrest her, and eventually detain her in a prison where she was tortured until she agrees to sell her land at a below-market price to local landowner. She angrily returns to the US and writes her elected officials asking the US government to help her and right the wrong she has suffered. Which is her best remedy or at least a place to start with reasonable prospect of a court remedy? a. Filing a lawsuit against the private landowner in Mexico in the ICJ. b. Filing a lawsuit against Mexico in the International Court of Justice (ICJ). c. Suing the Mexican landowner and Mexico both in US federal court seeking damages. d. Seeking diplomatic protection from US government and asking it to file a case seeking damages in the appropriate forum.

Seeking diplomatic protection from US government and asking it to file a case seeking damages in the appropriate forum.

Maine Jeans of Joy, Inc. (MJJ) is in Portland and manufactures blue jeans with its special logo on the jeans and sells them nationwide. It fills an order which is placed on its Internet website by an Idaho company (ZUMA) that is for 50,000 pair of jeans. The jeans are shipped to ZUMA's facility in Boise but are of inferior quality. ZUMA uses local legal counsel to sue MJJ in Idaho State civil court for contract breach. What is the best and most common jurisdictional defense in a typical case like this that MJJ can assert? a. Universal jurisdiction is appropriate. b. The court lacks subject matter jurisdiction over this case. c. ZUMA has no business presence in Maine and thus no "minimum contacts" there, there must be reciprocity before Idaho court asserts jurisdiction. d. MJJ has no "minimum contacts" with Idaho and thus there is no personal jurisdiction by the Idaho court over it.

MJJ has no "minimum contacts" with Idaho and thus there is no personal jurisdiction by the Idaho court over it.

Allen is a US citizen. He is a pirate and roams the Caribbean in his vessel with his fellow pirates looking for a vessel to attack. The "American Glory" is a vessel registered and operating under US laws. Allen's group of pirates boards that vessel and robs the passengers of all their cash and valuables. Allen departs the vessel with his loot and ultimately is captured in Brazil a month later where he is hiding out. He can be prosecuted in Brazil in the basis of the courts: a. Nationality jurisdiction but only if at least one of the injured passenger was a citizen of Brazil. b. Territorial jurisdiction. c. Universal jurisdiction. d. Protective jurisdiction.

Universal jurisdiction.