International Commercial Transactions
Exam Questions
Course Introduction
International Commercial Transactions examines the legal, regulatory, and practical frameworks governing cross-border business activities. The course explores key concepts such as international sales contracts, payment and financing mechanisms, transport and insurance of goods, dispute resolution, and the roles of international treaties including the United Nations Convention on Contracts for the International Sale of Goods (CISG). Students analyze complexities arising from differing legal systems, cultural practices, trade barriers, and ethical considerations, equipping them with the knowledge to navigate and manage commercial relationships in a global context.
Recommended Textbook
International Business Law 6th Edition by Ray A. August
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12 Chapters
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Page 2
Chapter 1: Introduction to International and Comparative Law
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Q1) The Security Council has 15 permanent member states.
A)True
B)False
Answer: False
Q2) The ________ holds that the legal existence of a state or government is dependent on recognition by other states.
A) doctrine of transformation
B) declaratory doctrine
C) constitutive doctrine
D) doctrine of incorporation
Answer: C
Q3) Distinguish between customs union and free trade area.
Answer: A group of states that have reduced or eliminated trade barriers among themselves and have established a common external tariff is called the customs union. A group of states that have reduced or eliminated trade barriers among themselves but maintain their individual tariffs in dealing with other states is called the free trade area.
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Chapter 2: State Responsibility and Environmental Regulation
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Q1) The ________ was issued by the United Nations Conference on the Environment and Development and it linked protection of the environment and development as related goals.
A) UN charter
B) Rio Declaration
C) Bonn Agreement
D) Kyoto Protocol
Answer: B
Q2) Adoption of the precautionary approach to protecting the environment was agreed upon in the Stockholm Declaration.
A)True
B)False
Answer: False
Q3) Any act of expropriation of foreign property is considered illegal under international law.
A)True
B)False
Answer: False
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Chapter 3: Dispute Settlement
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Sample Questions
Q1) The process by which an impartial third party makes an independent investigation and suggests a solution to a dispute is called ________.
A) negotiation
B) conciliation
C) arbitration
D) inquiry
Answer: B
Q2) The governmental interest doctrine states that a state is immune from suit in cases involving injuries that are the result of its governmental actions.
A)True
B)False
Answer: False
Q3) The ________ holds that municipal courts must decline to hear suits against foreign sovereigns.
A) governmental interest doctrine
B) doctrine of sovereign or state immunity
C) rule of absolute sovereign immunity
D) theory of restrictive sovereign immunity
Answer: B
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Page 5
Chapter 4: The Multinational Enterprise
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Sample Questions
Q1) Which of the following acts forbids monopolies and attempts to monopolize commerce or trade either between the states of the United States or in international commerce affecting the United States?
A) Section 2 of the Sherman Act
B) Section 2(a) of the Robinson-Patman Act
C) Section 4 of the Clayton Act
D) Section 7 of the Clayton Act
Q2) How is the theory of negligence in product liability different in common law states compared to countries that don't follow common law?
Q3) Establishing a branch in a foreign country does not create a true multinational enterprise.
A)True
B)False
Q4) Discuss the importance of the separate legal identity of juridical entities in business.
Q5) Article 82 of the European Community Treaty does not have an exception clause.
A)True
B)False
Q6) Describe a joint venture as a business model.
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Chapter 5: Foreign Investment
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Sample Questions
Q1) A(n) ________ is a printed statement given to prospective securities investors setting out a full, true, and plain disclosure of all material facts relating to the securities and the issuer.
A) prospectus
B) article of incorporation
C) memorandum of association
D) charter
Q2) The parts of a state's economy in which foreigners are encouraged to invest are called ________.
A) exclusive economic zones
B) special economic zones
C) foreign priority sectors
D) restricted sectors
Q3) Which of the following terms refers to the assurance of a host government that foreign investors will be treated the same way as local investors?
A) nondiscrimination guarantee
B) repatriation guarantee
C) stabilization clause
D) appraisal right
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Page 7
Chapter 6: Money and Banking
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Q1) Private money differs from official money in that private money ________.
A) cannot be used to pay debts
B) is exclusively used by the government
C) cannot be lent to private individuals
D) can also consist of stocks of rare metal
Q2) Which of the following organizations issues bank notes and coins and regulates the quantity of money in circulation?
A) the World Bank
B) the International Monetary Fund
C) A commercial bank
D) A central bank
Q3) Which of the following is the most commonly used short-term liquid instrument for trading in the interbank market?
A) a certificate of deposit
B) a deed
C) a letter of credit
D) a check
Q4) What are the different types of monies that are required in an international transaction?
Q5) How does a bank transfer money internationally?
Page 8
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Chapter 7: Trade in Goods
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Sample Questions
Q1) Which of the following best describes dumping?
A) It is a duty specifically levied to offset a subsidy.
B) It is the relinquishment of an obligation owed by another.
C) It is a financial contribution made by a government or other public body that confers a benefit on an enterprise, a group of enterprises, or an industry.
D) It is the selling of exported goods at prices below their normal value.
Q2) ________ are situations that excuse a WTO member state from complying with its GATT obligations in order for the state to protect certain essential public policy objectives.
A) Harmonized Systems
B) General exceptions
C) Safeguards
D) Security exceptions
Q3) Differentiate between free trade area and customs union.
Q4) Each member of the Missile Technology Control Regime administers its missile-related export controls independently.
A)True
B)False
Q5) Explain the Wassenaar Arrangement.
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Chapter 8: Services and Labor
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Q1) Which of the following is true of the Committee of Experts on the Application of Conventions and Recommendations?
A) It consists of individuals who are not biased toward any groups or governments.
B) Its members are appointed by the General Conference of the ILO.
C) It's members are drawn from government representatives of each member state.
D) It reviews the recommendations made by the Conference Committee on the Application of Conventions and Recommendations at the General Conference.
Q2) ________ of the EC Treaty grants the EU Council the power to "adopt such measures in the field of social security as are necessary to provide freedom of movement for workers."
A) Article 42
B) Article 39
C) Article 39(2)
D) Article 40
Q3) The Universal Declaration of Human Rights is a leading treaty among several nations, which deals with labor issues.
A)True
B)False
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10
Chapter 9: Intellectual Property
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Sample Questions
Q1) KFC and Pizza Hut are examples of distributorship.
A)True
B)False
Q2) ________ is the right of an author to communicate a copyrighted work to the public.
A) Property right
B) Neighboring right
C) Right of performance
D) Right of reproduction
Q3) A collective mark is a mark used exclusively by a licensee or franchisee to indicate that a product meets certain standards.
A)True
B)False
Q4) The ________ is the exclusive right of an author to make multiple copies of a copyrighted work.
A) right of reproduction
B) right of exhibition
C) neighboring right
D) moral right
Q5) What is an invention?
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Chapter 10: Sales
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Q1) The ________ is a rule that contracts should be interpreted according to the understanding that a reasonable person would have had at the time the agreement was made.
A) objective intent approach
B) parol evidence rule
C) plain meaning rule
D) stabilization clause
Q2) A firm offer is an offer ________.
A) in which a fixed price is not mentioned for the goods or the services being sold
B) in which the offeree is an individual and the offeror is an organization
C) which is governed by the laws of the WTO
D) that the offeror promises to keep open for a fixed period of time
Q3) How are the general principles of the CISG interpreted when dealing with a dispute?
Q4) Transactions involving auction sales come under the purview of the CISG.
A)True
B)False
Q5) Briefly explain how the CISG is organized.
Q6) Explain the seller's remedy of avoidance of installment contracts.
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Chapter 11: Transportation
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Q1) The ________ do(es) not apply to charterparties unless a bill of lading issued by the shipowner comes into the hands of a third party.
A) maritime lien
B) Himalaya Clause
C) Hague and Hague-Visby Rules
D) no arrival, no sale contract
Q2) Which of the following terms refers to a loss to a ship or its cargo that is not to be shared in by contributions from all those interested, but is to be borne by the owner of the injured thing?
A) dead freight
B) maritime lien
C) general average
D) particular average
Q3) An order bill of lading differs from a straight bill of lading in that, an order bill of lading ________.
A) gives the transferee greater rights
B) is non-negotiable
C) is issued to a named consignee
D) is issued by a shipper to an ocean carrier
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Page 13
Chapter 12: Financing
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Q1) In a draft transaction, if the drawee is a buyer of the drawer, then the draft is referred to as a ________.
A) promissory note
B) certificate of deposit
C) trade acceptance
D) check
Q2) A letter of credit is an instrument issued by a bank, or another person, at the request of an account party.
A)True
B)False
Q3) A bill involved in a draft transaction is considered a note ________.
A) if the drawer owes money to the drawee
B) if the drawee is drawer's buyer
C) if the drawee is a borrower of the drawer
D) if the drawer has kept money with the drawee for safeguarding
Q4) A bearer paper is different from an order paper in that a bearer paper ________.
A) cannot be negotiated
B) is negotiated by endorsement and delivery
C) is negotiated by delivery alone
D) is negotiated by endorsement alone
Page 14
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