International Business Law
Midterm Exam
Course Introduction
International Business Law explores the legal frameworks and regulations governing commercial transactions and investment across borders. This course covers key topics such as international contracts, dispute resolution mechanisms, trade regulations, intellectual property protection, and the roles of organizations like the World Trade Organization (WTO) and the International Monetary Fund (IMF). Students will analyze case studies and examine treaties, conventions, and ethical considerations relevant to multinational business operations, preparing them to navigate legal complexities in the global business environment.
Recommended Textbook
International Business Law and Its Environment 8th Edition by Richard Schaffer
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21 Chapters
1385 Verified Questions
1385 Flashcards
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Page 2
Chapter 1: Introduction to International Business
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63 Verified Questions
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Sample Questions
Q1) Comparative advantage exists if the costs of production and price received for the goods allow the goods to be sold for a higher price in a foreign country than at home.
A)True
B)False
Answer: True
Q2) If a party does not fulfill their obligations as set forth in a sales contract,it is known as:
A) Non-payment.
B) Termination.
C) Non-performance.
D) All of the above.
Answer: C
Q3) Global sourcing is the term commonly used to describe the process by which a firm attempts to locate and purchase goods or services on a worldwide basis.
A)True
B)False
Answer: True
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Chapter 2: International Law and the Worlds Legal Systems
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Q1) The IMF assists member countries that are having balance of payment difficulties.
A)True
B)False
Answer: True
Q2) The International Chamber of Commerce developed the Uniform Customs and Practice for Documentary Credit.
A)True
B)False Answer: True
Q3) Pacta sunt servanda means that every treaty in force is binding upon the parties to it and must be performed by them in good faith.
A)True
B)False Answer: True
Q4) In the United Nations General Assembly,all nations have an equal vote.
A)True
B)False
Answer: True
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Chapter 3: Resolving International Commercial Disputes
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Q1) A foreign company's first line of defense in litigation in the U.S.is often that they are not subject to the jurisdiction of the courts.
A)True
B)False
Answer: True
Q2) The realities of international marketplace and the recognition of the importance reducing uncertainty have persuaded many courts:
I. To accept choice of law and forum clauses in international contracts
II. To require mandatory arbitration clauses in international contracts
A) Both I and II.
B) Neither I nor II.
C) I only.
D) II only.
Answer: C
Q3) Choice of forum clauses fix in advance where the case will be heard by contract.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Sales Contracts and Excuses for
Nonperformance
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Sample Questions
Q1) Eastern Airlines contracted with Gulf Oil for a supply of jet fuel.An oil embargo resulted in a 400 percent increase in the price of oil.Gulf demanded a price increase from Eastern.Eastern sued to ensure its supply of oil at the contract price.The result in court was:
A) That Eastern won because Gulf should have foreseen this situation.
B) Gulf won due to commercial impracticability.
C) That Eastern lost because a 400 percent increase is too much of a hardship for Gulf.
D) None of the above would be the court's decision in this situation.
Q2) The Convention on Contracts for the International Sale of Goods (CISG)was developed to give U.S.business an advantage in international sales contracts.
A)True
B)False
Q3) Commercial impracticability is an excuse for nonperformance of a contract if it adds more than 20% to the cost of completing performance.
A)True
B)False
Q4) Re-write that contract using U.S.law.
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Chapter 5: The Documentary Sale and Terms of Trade
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Q1) Compare and contrast the instances in which an individual holding a bill of lading will and will not be protected from the adverse claims of third parties.
Q2) Trade terms are used in all international contracts for the sale of goods.
A)True
B)False
Q3) Consider when a shipping term as opposed to contradictory contract language will be most persuasive in identifying the type of contract.Vice versa?
Q4) Draft a bill of lading.
Q5) A sale made with terms "CIF Tokyo" includes in the price quoted for the goods which of the following:
A) Cash, in-transit expenses, foreign exchange expenses.
B) Cash, insurance, freight.
C) Cost, insurance, freight.
D) Currency exchange expenses, insurance, freight.
Q6) A seller who quotes on open account terms in a foreign currency bears the currency risk during the open credit period.
A)True
B)False
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
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Sample Questions
Q1) The U.S.law that governs the liability of an ocean carrier for transporting goods from one U.S.port to a foreign port is the:
A) The Hague Rules.
B) The Uniform Commercial Code.
C) The Harter Act.
D) The Carriage of Goods by Sea Act.
Q2) The type of marine insurance policy that allows the exporter to issue a certificate of insurance on a form provided by the insurance company is called:
A) Unlimited policy.
B) Shipment specific policy.
C) Discretionary policy.
D) None of the above.
Q3) Carriers transporting goods to Latin America may deliver the cargo to the party presenting the carta declaratoria.
A)True
B)False
Q4) Write an insurance policy for air or sea carriage.
Q5) Rewrite an insurance policy for carriage into a plain language policy.
Q6) Assess the changes resulting from the Ocean Shipping Reform Act of 1998.
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Chapter 7: Bank Collections, Trade Finance, and Letters of Credit
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Sample Questions
Q1) The type of letter of credit issued to guarantee that a party will fulfill its obligations under a service,construction,or sales contract is called:
A) An Irrevocable Letter of Credit.
B) Standby Letter of Credit.
C) Letter of Warranty Credit.
D) Confirmed Letter of Credit.
Q2) Which of the following is (are)true concerning the UCP?
A) The UCP is a standardized set of rules in virtually all nations.
B) Because the UCP was drafted by the ICC and is recognized in most states, it automatically governs international letters of credit.
C) The UCP will govern a letter of credit only if its provisions are incorporated into the letter of credit by reference.
D) A and C only.
E) A and B only.
Q3) Draft a letter of credit compliant with the standards of the UCP.
Q4) Weigh the benefits and detriments of counterpurchase,barter,and buy-back agreements.
Q5) Compare and contrast O'Meara with Sztejn.
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Chapter 8: National Lawmaking Powers and the Regulation
of Ustrade
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Sample Questions
Q1) The Commerce Clause vests the federal government with limited control over foreign commerce.
A)True
B)False
Q2) The drafters of the U.S. Constitution believed:
I. That economic disintegration could result if states were free to tax imports and exports. II. That the federal government should share regulation of international commerce with the states.
A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.
Q3) Draft an amendment to any U.S.anti-discrimination law to contemplate exclusions for FCN Treaty partners.
Q4) The drafters of the U.S.Constitution placed the power to regulate international trade equally in the state governments and federal government.
A)True
B)False
Page 10
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Chapter 9: Gatt Law and the World Trade Organization:
Basic Principles
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Sample Questions
Q1) Under normal trade relations,when a nation extends some privilege or right to one of its trading partners,that privilege automatically becomes applicable to all other trading partners.
A)True
B)False
Q2) Which of the following may not be a reliable criterion for determining whether import and domestic goods are "like products"?
A) Consumers' tastes and habits.
B) The product's end uses.
C) The product's uniform tariff classification.
D) Consumers' tastes and habits
Q3) The GATT Agreement on Technical Barriers to Trade is a code that has as its purpose:
A) To allow free movement of technical equipment among nations.
B) To establish technical data for computer applications.
C) To harmonize standards and standard-setting techniques.
D) None of the above.
Q4) Quotas serve to increase the amount of imports of a product.
A)True
B)False
11
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Chapter 10: Laws Governing Access to Foreign Markets
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Q1) The GATT 1994 Agreement on Government Procurement:
A) Requires fair, open, and nondiscriminatory procurement practices.
B) Sets up uniform procurement procedures to protect suppliers from different countries.
C) Applies only to those countries who have signed it.
D) Applies to the purchase of goods and services over $182,000.
E) All of the above.
Q2) Section 301 of the Trade Act of 1974 permits the United States to unilaterally retaliate against foreign companies that discriminate against U.S.goods or services.
A)True
B)False
Q3) In 1996,Japan promulgated amendments to its copyright law,extending protection to U.S.sound recordings published before 1971 as a result of WTO dispute settlement consultations as to whether the prior law violated the SPS Agreement.
A)True
B)False
Q4) Consider the similarities and differences between situations in which the U.S.Trade Act of 1974 can be used instead of the WTO dispute settlement procedures.
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Chapter 11: Regulating Import Competition and Unfair Trade
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Sample Questions
Q1) There are two types of import protection regulations in the U.S.:
I. Laws that provide relief to protect developing U.S. domestic companies.
II. Laws that allow non-market economy nations a financial break.
A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.
Q2) If a country is not a member of GATT,under U.S.law a countervailing duty can be imposed without regard to whether a U.S.firm is injured or not.
A)True
B)False
Q3) Dumping has become a fairly persistent problem in international trade and is often practiced by firms wishing to sell their excess production capacity at bargain prices to cover fixed costs.
A)True
B)False
Q4) Scenario
Loan guarantees by the French government to French filmmakers who utilize French equipment in the making of their movies.
Page 13
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Chapter 12: Imports, Customs, and Tariff Law
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Sample Questions
Q1) Customs rules and duty assessment rates are uniform throughout the free world.
A)True
B)False
Q2) A binding ruling,issued by the U.S.Bureau of Customs and Border Protection,is issued with regard to:
A) Penalties imposed for non-payment of duties owed.
B) Advance determination of the dutiable status of goods.
C) Seizure of goods not allowed for import to U.S.
D) All of the above.
Q3) Weigh the relative benefits and detriments of a unified customs protocol that would classify all goods.
Q4) Where an imported item could be classified under several different provisions of the Harmonized Code,it will generally fall under that provision which describes the item most specifically.
A)True
B)False
Q5) Compare and contrast GSP status with normal trade relations status.
Q6) In what ways might valuation methods implicate dumping and dumping remedies? Subsidies?
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Q7) Contrast the traditional "name,character,and use" test with that used presently.
Chapter 13: The Regulation of Exports
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Q1) Section 8 of the Export Administration Act does not create a private right of action in favor of victims of foreign boycotts.
A)True
B)False
Q2) In the United States,the office that initially reviews and rules on license applications is the:
A) Bureau of Industry and Security.
B) Office of Export Trade Control.
C) Export Administration Board.
D) Export Policy Operations Committee.
Q3) In some circumstances,the presentation of research by a U.S.scientist at a convention in a foreign nation may require an export license.
A)True
B)False
Q4) The Department of Commerce possesses the power to restrict imports.
A)True
B)False
Q5) Compare and contrast unilateral export controls with multilateral controls.
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Chapter 14: North American Free Trade Law
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Sample Questions
Q1) Which of the following statements is untrue regarding emergency safeguard actions under NAFTA?
A) Special safeguards for textiles may be applied where increased imports cause "serious damage" to the domestic industry.
B) Safeguards are available for ten years for certain agricultural products.
C) The country using them must offer the exporting country trade compensation.
D) Safeguards can take the form of both tariffs and quotas.
E) All of the above.
Q2) Which of the following statements is untrue regarding trade between the U.S.,Canada,and Mexico?
A) Canada and the United States are each other's largest trading partners.
B) Mexico underwent a serious financial crisis in 1994.
C) Some key industries in Mexico are government-owned monopolies.
D) Mexico has had a traditionally open market that encourages foreign investment.
E) All of the above statements are correct.
Q3) No other trade sector is as complex or as highly regulated as trade in textiles.
A)True
B)False
Q4) Weigh the relative merits for granting the Caribbean countries NAFTA membership.
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Chapter 15: The European Union and Other Regional Trade Areas
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Q1) The formation of the European Economic Community created a uniform external tariff for non-members that complied with the objectives of GATT.
A)True
B)False
Q2) The Four Freedoms preempt any action by the member states in the areas of goods,services,capital and people.
A)True
B)False
Q3) Write a memorandum advocating for or against the entrance of Turkey into the EU.
Q4) The Commission of the European Union consists of twenty members. A)True
B)False
Q5) The European Union is committed to a common foreign policy. A)True B)False
Q6) The Council of Europe is an EU institution. A)True
B)False
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Q7) Compare and contrast the European Court of Justice with the U.S.Supreme Court.
Chapter 16: International Marketing Law: Sales
Representatives, Advertising, and Ethical Issues
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Q1) In a prosecution for violating the FCPA,the defendant's conduct will be excused if he or she can prove that the payment was paid as a result of extortion by the foreign official.
A)True
B)False
Q2) Truth-in-advertising is now a generally accepted business practice and laws prohibiting false advertising exist in many nations.
A)True
B)False
Q3) One of the main objectives of the FCPA is to prohibit foreign companies in the United States from bribing U.S.government officials.
A)True
B)False
Q4) The United States is one of the few nations of the world that regulates advertising to children.
A)True
B)False
Q5) Compare and contrast U.S.and European regulations aimed at advertising to children.
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Chapter 17: Licensing Agreements and the Protection of Intellectual Property Rights
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Q1) The TRIPS Agreement:
A) Became effective July 1, 1995.
B) Promises to create a more effective international system for protection of IPRs.
C) Requires every member of the WTO to abide by the Paris Convention and the Uniform Copyright Convention.
D) A, B, and C.
Q2) Assess the relative merits of producing a new product or technology abroad as opposed to domestically.
Q3) The Paris Convention:
A) Is the seminal patent protection treaty.
B) Requires national treatment for foreign trademark and patent applications from signatory countries.
C) Provides a trademark holder in any signatory country a twelve-month period of priority within which to make similar applications in signatory countries.
D) A, B, and C.
Q4) Develop a document that proposes international standards for trademark licensing or use by a subsidiary (or sale to a third party)of copyrighted material.
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Chapter 18: Takings and National Controls on Foreign Direct Investment
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Q1) Under U.S.law,corporations are taxed on all income,including income from foreign sources.
A)True
B)False
Q2) OPIC insurance is primarily intended to protect U.S.investments in Japan,Canada and Western Europe.
A)True
B)False
Q3) Because passive investments create the least risk of foreign control,they are the least regulated of foreign investments.
A)True
B)False
Q4) One tax issue that presents no problem for a U.S.investor is the question of crediting taxes it has paid to a foreign country against taxes it would have to pay the U.S.on its federal return.
A)True
B)False
Q5) Weigh the strengths and weaknesses of the various methods that a business may use to ensure access to hard currency.
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Chapter 19: Labor and Employment Discrimination Law
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Sample Questions
Q1) You are an international human resources consultant retained by Pacific Paper Products,a U.S.corporation headquartered in Seattle.PPP recently downsized its operations located in Germany,which resulted in significant layoffs.The basis of this decision was the inability of the German plants to generate sufficient revenues.Although marginally profitable,PPP concluded that it would be fiscally prudent to downsize the facilities.PPP provided ten days written notice to their employees at these facilities prior to their termination.In response,the employees have submitted claims for wrongful discharge.You have been retained to advise PPP's board of directors on the validity of these claims.Did PPP's closure of the plant violate German law? Are the former employees' claims for wrongful discharge valid? Why or why not?
Q2) Compare and contrast employment discrimination laws in the United States with those in Europe.What are the policy underpinnings?
Q3) Provide examples of collective bargaining agreements that would and would not fall within the "foreign laws" exception.
Q4) In Germany,the supervisory board of directors is responsible for representing shareholder interests.
A)True
B)False
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Chapter 20: Environmental Law
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Q1) Address the strengths and weaknesses of the U.S.government's environmental polices pertaining to pesticides (such as those addressed by the never-adopted ban on the export of unsafe pesticides).
Q2) There is no U.S.law forbidding the export of pesticides banned in the U.S.to foreign countries.
A)True
B)False
Q3) The U.S.prohibits the export of pesticides not approved by the U.S.EPA.
A)True
B)False
Q4) Developing countries are especially eager to reduce their industrial and transportation emissions.
A)True
B)False
Q5) Which of the following laws regulate the export of hazardous materials?
A) GATT.
B) TOSCA.
C) FIFRA.
D) A and B.
E) B and C.
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Chapter 21: Regulating the Competitive Environment
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Sample Questions
Q1) Knowledgeable that Canada,Germany,and the UK have enacted blocking legislation,craft a treaty on this issue.How might the different interests of these countries and partnerships (or lack thereof)with them affect any treaty? Students may also wish to read Laker Airways v.Sabena,Belgian World Airlines,731 F.2d 909 (D.C.Cir.1984)for further background).
Q2) The substance of many countries' antitrust law is very similar in focusing on two types of activity.The two types of activities are:
A) Prohibitions against price cutting and resale price agreements.
B) Prohibitions against agreements attempting to restrict competition and the abuse of a dominant market position.
C) Prohibitions against economizing to achieve greater market share and lack of marginal return.
D) Both A and B.
Q3) The U.S.antitrust law distinguishes between actions that are:
A) Per se wrong and actions to which the role of reason applies.
B) Marginally wrong and actions to which the rule of reason applies.
C) Partially wrong and actions to which the rule of best judgment applies.
D) Good and bad.
Q4) Write an argument that clawback provisions violate international law.
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