Business Law - Chapter 06 International and Comparative Law

The terms international law and comparative law do not mean the same thing. 
TRUE

International law governs the conduct of states and international organizations and their relationships with one another and natural and juridical persons, while comparative law is the study of legal systems of different states.

When doing business internationally, a foreign sales representative does the same thing as a distributor. 
FALSE

Unlike the foreign sales representative, the distributor takes title to the goods and assumes the risk of being unable to resell them at a profit.

A franchise agreement is the same thing as a joint venture. 
FALSE

A franchise agreement is a contract whereby a company (known as the franchisor) grants permission (a license) to a foreign entity (known as a franchisee) to utilize the franchisor's name, trademark, or copyright in the operation of a business and associated sale of goods in a foreign state. In a joint venture with a company in the host state, the parties share profits and management responsibilities for a specific project.

Because ethical issues vary from country to country, international business persons should not take ethical considerations into account in the decision-making process. 
FALSE

International businesspersons must take ethical considerations into account in the decision-making process.

The General Agreement on Tariffs and Trade became effective in 2000. 
FALSE

The General Agreement on Tariffs and Trade (GATT) became effective on January 1, 1948.

A subsidy is a government financial contribution that confers a benefit on a specific industry or enterprise. 
TRUE

A subsidy is a government payment to a specific industry or enterprise. Subsidies can be direct transfers of funds, such as loans and grants; loan guarantees; tax credits; government procurement; and price supports.

In a multilateral free trade agreement, three or more states agree to reduce and gradually eliminate tariffs and other trade barriers. 
TRUE

In a multilateral free trade agreement, three or more states agree to reduce and gradually eliminate tariffs and other trade barriers. The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico is a multilateral free trade agreement.

The United States is not a party to the Central American Free Trade Agreement. 
FALSE

The United States is a party to the Central American Free Trade Agreement (CAFTA) with El Salvador, Guatemala, Nicaragua, Honduras, Costa Rica, and the Dominican Republic.

The European Union is an example of a customs union. 
TRUE

The United States has no bilateral trade agreements. 
FALSE

States may also enter into bilateral free trade agreements, which relate to trade between two states. The United States has several bilateral free trade agreements, including those with Australia, Bahrain, Chile, Israel, Jordan, Morocco, Peru, and Singapore.

Which of the following best describes the term "comparative law?" 
A. It is the study of the legal systems of different states. For example a comparative legal theorist might study contracts in the American, Chinese, and French legal systems by identifying and contrasting applicable national laws.
B. It is the study of the laws governing the conduct of states and international organizations and their relationships with one another.
C. It is the study of the difference between public and private law in the United States.
D. It is the study of the difference between constitutions and administrative rules and regulations within the United States.
E. It is the study of international organizations and their structure.

Comparative law is the study of the legal systems of different states. For example, a comparative legal theorist might study contracts in the American, Chinese, and French legal systems by identifying and contrasting applicable national laws.

A reference to laws governing the conduct of states and international organizations and their relationships with one another is ______. 
A. Comparative law
B. International law
C. Joint law
D. Foreign subsidiary law
E. Affiliate law

The terms international law and comparative law are often used interchangeably, but they are quite different. International law governs the conduct of states and international organizations and their relationships with one another and with natural and juridical persons.

Which of the following are international organizations? 
A. The United Nations
B. The International Monetary Fund
C. The International Bank for Reconstruction and Development (World Bank)
D. The United Nations and the International Monetary Fund, but not the International Bank for Reconstruction and Development (World Bank)
E. The United Nations, the International Monetary Fund, and the International Bank for Reconstruction and Development (World Bank)

The United Nations, the International Monetary Fund, the International Bank for Reconstruction and Development (World Bank), and the World Trade Organization are international organizations.

What has the U.S. Supreme Court held regarding whether U.S. courts must rely on customary international law? 
A. The U.S. Supreme Court has held that US courts may disregard customary international law.
B. The U.S. Supreme Court has held that even if a governing international agreement says otherwise, a U.S. court must rely on customary international law.
C. The U.S. Supreme Court has held that even if a controlling executive act is to the contrary, U.S. courts must rely on customary international law.
D. The U.S. Supreme Court has held that regardless of the existence of any legislative act to the contrary, U.S. courts must rely on customary international law.
E. The U.S. Supreme Court has held that in the absence of a governing international agreement or controlling executive or legislative act or judicial decision, U.S. courts must rely on customary international law.

The U.S. Supreme Court has held that in the absence of a governing international agreement or controlling executive or legislative act or judicial decision, U.S. courts must rely on customary international law.

Which of the following is an international agreement? 
A. A written agreement made between states governed by international law and relating to international subject matter.
B. An agreement that is only between two states, not three or more relating to an international subject matter.
C. An agreement that is made between at least three states regarding an international subject matter.
D. A general and consistent practice by states regardless of whether the practice is accepted as law.
E. A general and consistent practice by states that is accepted as law.

An international agreement is a written agreement made between states governed by international law that relates to an international matter. International agreements can be bilateral (between two states) or multilateral (between three or more states).

A company that sends its products to a foreign marketplace for sale has engaged in ______. 
A. Importation
B. Subsidization
C. Exportation
D. Foreign transaction
E. Foreign distributing

The simplest method of entering a foreign market is through the export of the company's product to the foreign marketplace.

An agent who distributes, represents, or sells goods on behalf of a foreign seller is referred to as a[n] ______. 
A. Export representative
B. Import representative
C. Foreign sales representative
D. Foreign exportation proponent
E. International sales and importation expert

A foreign sales representative is an agent who distributes, represents, or sells goods on behalf of a foreign seller and forwards orders directly to the company. The representative is usually compensated through commissions on completed transactions.

A[n] _____ purchases goods from a seller for resale in a foreign market. 
A. Foreign sales representative
B. Distributor
C. Licensing agent
D. Joint agent
E. Affiliate agent

Companies may also engage distributors for their products, who purchase goods from a seller for resale in a foreign market. Distributors are responsible for supporting and servicing the products they sell. Unlike the foreign sales representative, the distributor takes title to the goods and assumes the risk of being unable to resell them at a profit.

How does ratification of international agreements occur in the U.S.? 
A. Through the advice and consent of two-thirds of the Senate after the president submits the agreement for consideration.
B. Through the advice and consent of two-thirds of the House of Representatives after the president submits the agreement for consideration.
C. Through the advice and consent of two-thirds of the Senate and two-thirds of the House of Representatives after the president submits the agreement for consideration.
D. Through consent of the president.
E. Through the consent of the president and the approval of at least half the individual state legislatures.

Ratification occurs in many different ways. In the United States, it requires the advice and consent of two-thirds of the Senate after the president submits the agreement for consideration.

The _____ prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business. 
A. The Foreign Corrupt Practices Act
B. The Foreign Bribery Act
C. The Foreign Political Act
D. The International Fairness Objective Act
E. The International Trade Act

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business.

Which of the following is a tax levied on imported goods? 
A. Non-tariff barrier
B. Embargo
C. Indirect barrier
D. Tariff
E. Dumping

Tariffs are taxes levied on imported goods.

Which of the following are examples of non-tariff barriers? 
A. Quotas
B. Embargoes
C. Indirect barriers
D. Quotas and embargoes, but not indirect barriers
E. Quotas, embargoes, and indirect barriers

A nontariff barrier is any impediment to trade other than tariffs, including quotas, embargoes, and indirect barriers.

Which of the following is a comprehensive multilateral trading system designed to achieve distortion-free international trade through the minimization of tariffs and removal of artificial barriers? 
A. The International Agreement on Non-tariffs and Trade
B. The World Trade Organization Agreement
C. The General Agreement on Tariffs and Trade
D. The North American Free Trade Agreement
E. The European Free Trade Agreement

The General Agreement on Tariffs and Trade (GATT) is a comprehensive multilateral trading system designed to achieve distortion-free international trade by minimizing tariffs and removing artificial barriers.

The ____ facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes. 
A. World Trade Organization
B. Generally Favored Nation Organization
C. National Trade Organization
D. International Cooperation Agreement
E. International Marketing Agreement

The World Trade Organization facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes.

The _____ principle requires that World Trade Organization member states treat like goods coming from other World Trade Organization member states on an equal basis. 
A. Normal trade relations
B. The like treatment
C. The quantitative restrictions
D. The nondiscriminatory
E. The fairness

GATT established several general principles of trade law. Article I addresses the principle of most-favored-nation relations, a principle now known as normal trade relations. This principle requires that WTO member states treat like goods coming from other WTO member states on an equal basis.

Which of the following is a practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter's home market? 
A. Price cutting
B. Disposal
C. Dumping
D. Profit maximizing
E. Subsidizing

Dumping is the practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter's home market.

Which of the following is one of the three basic types of subsidies? 
A. Indirect subsidy
B. Actionable subsidy
C. International subsidy
D. Group subsidy
E. Quantitative subsidy

Actionable subsidies are illegal under Article VI of GATT. They include subsidies payable to domestic manufacturers either on the basis of export performance or for the use of domestic, rather than imported, input in the manufacturing process. Actionable subsidies are remedied through the imposition of countervailing duties, special tariffs imposed on subsidized goods to offset the benefit of the illegal subsidy.

The ____ allows recognized governments of WTO member states to bring an action alleging a violation of the GATT. 
A. Trade barrier agreement
B. Mediation/arbitration agreement
C. World dispute resolution agreement
D. Dispute settlement understanding
E. None of the above

The Dispute Settlement Understanding allows recognized governments of WTO member states to bring an action alleging a violation of GATT.

Which of the following countries are signatories to the North American Free Trade Agreement? 
A. United States, Canada, and Japan
B. United States, Canada, and Mexico
C. Canada, Mexico, and Great Britain
D. England, France, and Italy
E. England, France, and Spain

The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico is a multilateral free trade agreement.

A ____ is a free trade area with the additional feature of a common external tariff on products originating from outside the union. 
A. Customs union
B. Free trade union
C. External tariff union
D. International tariff union
E. Customs trade union

A customs union is a free trade area with the additional feature of a common external tariff on products originating outside the union.

Many ______ are derived from Roman law. 
A. Common law systems
B. Case law legal systems
C. Civil law systems
D. Socialist legal systems
E. Islamic legal systems

Many civil law systems are derived from Roman law. Other civil law systems were strongly influenced by the French Civil Code of 1804 and the German Civil Code of 1896.

Which of the following is a characteristic of civil law? 
A. Precedent is an important source of law in the civil law system.
B. Civil law systems use a system of separation of powers.
C. The civil law procedure is like the U. S. system of checks and balances.
D. In civil law systems the legislative branch has little authority.
E. Judges in civil law systems may create new law.

Civil law systems assume a separation of powers, but it is unlike the U.S. system of checks and balances. In civil law systems, the legislative branch has ultimate authority. The judicial branch interprets the code and applies it to resolve disputes. However, the judicial branch cannot create its own law.

In the civil law system, which of the following has the primary responsibility for the development of evidence? 
A. The plaintiff's attorney
B. The defendant's attorney
C. Both the plaintiff's attorney and the defendant's attorney in conjunction
D. The judge
E. Witnesses

The judge is primarily responsible for developing evidence by asking witnesses questions and introducing legal theories.

Which of the following systems originated from the English legal system? 
A. Civil law
B. Asian law
C. Statutory law
D. Inquisitorial law
E. Common law

Common law systems originated in the English legal system. English common law began in 1066, when William the Conqueror assumed the English throne.

Which type of legal system exists in North Korea? 
A. Civil legal system
B. Common law legal system
C. Socialist legal system
D. Islamic legal system
E. Asian legal system

Socialist legal systems, such as exist in Cuba and North Korea, are based on the premise that the rights of society as a whole outweigh the rights of the individual.

Which of the following is literally the "Law of Merchants?" 
A. Lex Mercatoria
B. Lex Seller
C. Ad Merchandiso
D. Lex Loci
E. Res Judicata

One potential source of contract law is the lex mercatoria, literally the "law of merchants."

Which of the following is false regarding the Convention on the International Sale of Goods? 
A. It applies to transactions involving the commercial sale of goods.
B. National contract law applies in areas not covered by the Convention on the International Sale of Goods.
C. The Convention on the International Sale of Goods was adopted in 2000.
D. The United States has adopted the Convention on the International Sale of Goods.
E. The Convention on the International Sale of Goods has been ratified by the majority of states in the developed world.

The CISG was adopted in 1980 and has been ratified by the majority of states in the developed world, including Australia, Canada, China, Korea, Mexico, Russia, most nations of Western Europe, and the United States, where it became effective in 1988.

The Convention on the International Sale of Goods recognizes a concept by which a buyer may give notice to the seller that delivery will be accepted beyond the time prescribed in the contract. That concept is known as _____________. 
A. Nachfrist
B. Benach
C. Offer of late performance
D. Tender of late performance
E. Stare decisis

Nachfrist—allows additional time for performance of a contract upon notice to the other party.

Which of the following references a standard meaning that either the employer or the employee may terminate the employment relationship at any time? 
A. Employment-at-will
B. Unconnected employment
C. Nachfrist
D. Reasonable employment
E. Unreasonable employment

The employment relationship in the United States is governed by the employment-at-will standard. This standard means either the employer or the employee may terminate the employment relationship at any time.

Which of the following is true regarding minimum-wage laws? 
A. The People's Republic of China has a national minimum-wage law.
B. Canada has a national minimum-wage law.
C. Italy has a national minimum-wage law.
D. Germany has a national minimum-wage law.
E. None of the above is true.

Some states, such as the People's Republic of China have no national minimum-wage laws. Minimum wages are established by provincial and municipal government officials. Canada lacks a national minimum-wage law. Minimum wages are established individually by the provinces. In other states that lack national minimum-wage laws, such as Denmark, Finland, Germany, Italy, and Sweden, industrial collective agreements establish minimum wages.

Which of the following prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitations on working hours, and compensation adequate to provide for the worker's health and that of his or her family? 
A. The Universal Declaration of Human Rights of 1948
B. Title VII of the Civil Rights Act of 1964
C. The Fair Wage Standard of 2000
D. The Universal Employee Care Act of 1990
E. The International Freedom Act of 2003

The Universal Declaration of Human Rights of 1948, often referred to as the basis for modern human rights law, prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitation of working hours, and compensation adequate to provide for the worker's health that of his or her family.

Which of the following is jurisdiction over a court of persons appearing before it? 
A. Subject matter jurisdiction
B. Individual jurisdiction
C. Personal jurisdiction
D. Litigation jurisdiction
E. Superior jurisdiction

Personal jurisdiction is the power of the court over the persons appearing before it.

____ permits adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum. 
A. General personal jurisdiction
B. Specific person jurisdiction
C. Local personal jurisdiction
D. International personal jurisdiction
E. Domestic personal jurisdiction

General personal jurisdiction permits adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum, or location where the claim is filed.

Which of the following is a multilateral convention establishing procedures for transnational discovery between private persons in different states? 
A. Smith Evidence Conventions
B. International Evidence Convention
C. Discovery Convention
D. Hague Evidence Convention
E. NAFTA Evidence Convention

The Hague Evidence Convention, a multilateral convention establishing procedures for transnational discovery between private persons in different states, attempts to resolve such problems, it has been ratified by only 31 states.

Which of the following is an international agreement governing the arbitration of private international disputes that has been ratified by the U.S.? 
A. The Hague Convention
B. The International Arbitration Convention
C. The French Convention
D. The New York Convention
E. The NAFTA Convention

The New York Convention is an international agreement governing the arbitration of private international disputes and has been ratified by 144 states to date, including the United States.

____ is the type of alternative dispute resolution procedure wherein disputes are submitted for resolution to private, non-official persons selected in a manner provided by law or the agreement of the parties. 
A. Mediation
B. Arbitration
C. Neutral evaluation
D. International evaluation
E. Multi-cultural evaluation

Arbitration is a type of alternative dispute resolution whereby disputes are submitted for resolution by private, nonofficial persons selected in a manner provided by law or the agreement of the parties.

Which of the following is true regarding the enforceability of foreign judgments in the United States? 
A. Foreign judgments are entitled to full faith and credit.
B. Foreign judgments are entitled to full faith, but not credit.
C. Foreign judgments are neither entitled to full faith and credit, nor are they evidence of the justice of the plaintiff's claims.
D. Foreign judgments are not entitled to full faith and credit, but are only evidence of the justice of the plaintiff's claims.
E. By statutory law, foreign judgments must be disregarded in the U. S.

Judgments obtained in foreign courts may not be enforceable in other states. For example, in the United States, foreign judgments are not entitled to full faith and credit but are only evidence of the justice of the plaintiff's claims.

Which of the following is true regarding attempts to enforce judgments obtained in the U.S. in other countries? 
A. Courts in many foreign countries may refuse to enforce U.S. civil judgments deemed to be criminal or penal in nature such as taxes and fines.
B. Courts in all other countries enforce U.S. civil judgments just as they would be enforced in this country.
C. Courts in all other countries enforce U.S. civil judgments just as they would be enforced in the U.S. only with respect to criminal matters.
D. Courts in all other countries enforce U.S. judgments just as they would be enforced in the U.S., but only with respect to tax matters.
E. Courts in all other countries enforce U.S. judgments just as they would be enforced in the U.S., but only with respect to awards of punitive damages.

Foreign states may refuse to enforce U.S. civil judgments deemed to be criminal or penal in nature (such as taxes and fines) and awards of punitive damages.

What is the minimum wage per hour in the U.S.? 
A. $7.25
B. $8.30
C. $5.30
D. $6.50
E. $10.00

As of summer 2009, the current minimum wage in the U.S. is $7.25 per hour.

Which of the following is a doctrine that permits courts to decline to exercise jurisdiction where there is a more convenient forum to hear the case? 
A. Forum non conveniens
B. Abstention
C. Convenience el forum
D. Jurisdictional convenience
E. Absolute privilege

Forum non conveniens is a doctrine that permits courts to decline to exercise jurisdiction where there is a more convenient forum to hear the case.