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Quiz 23 :

Warranties

Quiz 23 :

Warranties

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Dumping Nuclear powder plants use low enriched uranium (LEU) as fuel. LEU consists of feed uranium enriched by energy to a certain assay-the percentage of the isotope necessary for a nuclear reaction. The amount of energy is described by an industry standard as a "separative work unit" (SWU). A nuclear utility may buy LEU from an enricher, or the utility may provide an enricher with feed uranium and pay for the SWUs necessary to produce LEU. Under an SWU contract, the LEU returned to the utility may not be exactly the uranium the utility provided. This is because feed uranium is fungible and trades like a commodity (such as wheat or corn), and profitable enrichment requires the constant processing of undifferentiated stock. Foreign enrichers, including Eurodif, S.A., allegedly exported LEU to the United States and sold it for "less than fair value." Did this constitute dumping? Explain. If so, what could be done to prevent it? [ United States v. Eurodif, S.A. , __ U.S. __, 129 S.Ct. 878, 172 L.Ed.2d 679 (2009)]
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Finding the type of dumping it is:
• Yes, this would constitute dumping.
• Dumping is where a foreign nation sells a product for less than fair market value in the United States.
• Fair market value is determined by how much the foreign nation sells the product for in its home country and compares it the price abroad.
• In this problem, it is clearly asserted that the product is sold for less than fair market value and thus, would be considered dumping.
Finding the preventions:
• One way to prevent dumping is a method that the United States currently uses - an antidumping duty.
• An antidumping duty is a extra tariff when an importer attempts to sell in the American market. Applying the duty equalizes the price differential between the foreign and domestic products.

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Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco over a six-year period. After the government was replaced and a democracy installed, the Honduran government sought to reduce the size of its military, and its relationship with Robco deteriorated. Honduras refused to honor the contract and purchase the inventory of arms, which Robco could sell only at a much lower price. Robco filed a suit in a federal district court in the United States to recover damages for this breach of contract by the government of Honduras. Using the information presented in the chapter, answer the following questions. Should the Foreign Sovereign Immunities Act (FSIA) preclude this lawsuit? Why or why not? DEBATE THIS: The U.S. federal courts are accepting too many lawsuits initiated by foreigners that concern matters not relevant to this country.
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Preclusion of the Lawsuit by FSIA
The Foreign Sovereign Immunities Act (FSIA) provides jurisdictional immunity to foreign state with certain exceptions which are as follows:
a.
When the foreign state expressly or impliedly waived its immunity.
b.
When the foreign state is involved with the US regarding commercial activity or any activity outside the state which has direct effects on the US.
c.
When any kind of tort was committed by a foreign citizen in the US.
In this scenario, R, Inc. is having commercial nexus with the Honduras state as R, Inc. is arms dealer and earlier government of Honduras had contract with the company to supply weapons. This established the commercial activity between the foreign state and the company. This activity lies in the exception to the immunity to foreign states. Hence, FSIA will not impede this lawsuit.

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Comity In 1995, France implemented a law that makes the use of the French language mandatory in certain legal documents. Documents relating to securities offerings, such as prospectuses, for example, must be written in French. So must instruction manuals and warranties for goods and services offered for sale in France. Additionally, all agreements entered into with French state or local authorities, with entities controlled by state or local authorities, and with private entities carrying out a public service (such as providing utilities) must be written in French. What kinds of problems might this law pose for U.S. businesspersons who wish to form contracts with French individuals or business firms?
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Laws Posed for US Businessmen Forming Contracts with French Business Firms
If all the contracts were in foreign language, that is, French (F), then it might create a huge problem with the US businessman who wished to form contract with F individual or businessman. The problems that the law might imply in this case are discussed as follows:
a.
It is very difficult for the US nationals to understand the F language therefore, it will cause problem while determining the terms and conditions of contract.
b.
It will be most likely that F businessman will take undue advantage of this weakness and will commit fraud or breach of contract as it will be difficult for the US businessman to understand the terms and conditions.
c.
This language hurdle will directly affect the relations among the state and will also affect the commercial relationship between both the countries as US businessman then desist in entering contract with the F businessman.
d.
It will be difficult to understand the laws of France when forming contracts with them for the US businessmen as the F laws differ from those of US depending on the political and other perspectives.

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International Agreements and Jurisdiction The plaintiffs in this case were descendants of Holocaust victims who had lived in various countries in Europe. Before the Holocaust, the plaintiffs' ancestors had purchased insurance policies from Assicurazioni Generali, S.P.A., an Italian insurance company. When Generali refused to pay benefits under the policies, the plaintiffs, who were U.S. citizens and the beneficiaries of these policies, sued for breach of the insurance contracts. Due to certain agreements among nations after World War II, such lawsuits could not be filed for many years. In 2000, however, the United States agreed that Germany could establish a foundation-the International Commission on Holocaust-Era Insurance Claims, or ICHEIC-that would compensate victims who had suffered losses at the hands of the Germans during the war. Whenever a German company was sued in a U.S. court based on a Holocaust-era claim, the U.S. government would inform the court that the matter should be referred to the ICHEIC as the exclusive forum and remedy for the resolution. There was no such agreement with Italy, however. The plaintiffs sued the Italy-based Generali in a U.S. district court. The court dismissed the suit, and the plaintiffs appealed. Did the plaintiffs have to take their claim to the ICHEIC rather than sue in a U.S. court? Why or why not? [ In re Assicurazioni Generali, S.P.A., 592 F.3d 113 (2d Cir. 2010)]
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Dumping A newspaper printing press system is more than a hundred feet long, stands four or five stories tall, and weighs 2 million pounds. Only about ten of the systems are sold each year in the United States. Because of the size and cost, a newspaper may update its system, rather than replace it, by buying "additions." By the 1990s, Goss International Corp. was the only domestic maker of the equipment in the United States and represented the entire U.S. market. Tokyo Kikai Seisakusho (TKSC), a Japanese corporation, makes the systems in Japan. In the 1990s, TKSC began to compete in the U.S. market, forcing Goss to cut its prices below cost. TKSC's tactics included offering its customers "secret" rebates on prices that were ultimately substantially less than the products' actual market value in Japan. According to TKSC office memos, the goal was to "win completely this survival game" against Goss, the "enemy." Goss filed a suit in a federal district court against TKSC and others, alleging illegal dumping. At what point does a foreign firm's attempt to compete with a domestic manufacturer in the United States become illegal dumping? Was that point reached in this case? Discuss. [Goss International Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 434 F.3d 1081 (8th Cir. 2006)]
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Should U.S. firms doing business internationally send female employees to foreign nations that reject any role for women in business? Why or why not? How can a U.S. company accommodate the culture of foreign nations and still treat its own employees equally?
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Sovereign Immunity Bell Helicopter Textron, Inc., designs, makes, and sells helicopters with distinctive and famous trade dress that identifies them as Bell aircraft. Bell also owns the helicopters' design patents. Bell's Model 206 Series includes the Jet Ranger. Thirty-six years after Bell developed the Jet Ranger, the Islamic Republic of Iran began to make and sell counterfeit Model 206 Series helicopters and parts. Iran's counterfeit versions- the Shahed 278 and the Shahed 285-use Bell's trade dress (see Chapter 8). The Shahed aircraft was promoted at an international air show in Iran to aircraft customers. Bell fi led a suit in a federal district court against Iran, alleging violations of trademark and patent laws. Is Iran-a foreign nation-exempt in these circumstances from the jurisdiction of U.S. courts? Explain. [Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 764 F.Supp.2d 122 (D.D.C. 2011)]
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Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco over a six-year period. After the government was replaced and a democracy installed, the Honduran government sought to reduce the size of its military, and its relationship with Robco deteriorated. Honduras refused to honor the contract and purchase the inventory of arms, which Robco could sell only at a much lower price. Robco filed a suit in a federal district court in the United States to recover damages for this breach of contract by the government of Honduras. Using the information presented in the chapter, answer the following questions. Does the act of state doctrine bar Robco from seeking to enforce the contract? Explain. DEBATE THIS: The U.S. federal courts are accepting too many lawsuits initiated by foreigners that concern matters not relevant to this country.
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Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco over a six-year period. After the government was replaced and a democracy installed, the Honduran government sought to reduce the size of its military, and its relationship with Robco deteriorated. Honduras refused to honor the contract and purchase the inventory of arms, which Robco could sell only at a much lower price. Robco filed a suit in a federal district court in the United States to recover damages for this breach of contract by the government of Honduras. Using the information presented in the chapter, answer the following questions. Suppose that prior to this lawsuit, the new government of Honduras had enacted a law making it illegal to purchase weapons from foreign arms dealers. What doctrine of deference might lead a U.S. court to dismiss Robco's case in that situation? DEBATE THIS: The U.S. federal courts are accepting too many lawsuits initiated by foreigners that concern matters not relevant to this country.
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Why does the UCC protect innocent persons (good faith purchasers) who buy goods from sellers with voidable title but not innocent persons who buy goods from sellers with void title?
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QUESTION WITH SAMPLE ANSWER: Dumping. The U.S. pineapple industry alleged that producers of canned pineapple from the Philippines were selling their canned pineapple in the United States for less than its fair market value (dumping). The Philippine producers also exported other products, such as pineapple juice and juice concentrate, which used separate parts of the same fresh pineapple, so they shared raw material costs, according to the producers' own financial records. To determine fair value and antidumping duties, the pineapple industry argued that a court should calculate the Philippine producers' cost of production and allocate a portion of the shared fruit costs to the canned fruit. The result of this allocation showed that more than 90 percent of the canned fruit sales were below the cost of production. Is this a reasonable approach to determining the production costs and fair market value of canned pineapple in the United States? Why or why not?
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Comity Jan Voda, M.D., a resident of Oklahoma City, Oklahoma, owns three U.S. patents related to guiding catheters for use in interventional cardiology, as well as corresponding foreign patents issued by the European Patent Office, Canada, France, Germany, and Great Britain. Voda filed a suit in a federal district court against Cordis Corp., a U.S. firm, alleging infringement of the U.S. patents under U.S. patent law and of the corresponding foreign patents under the patent law of the various foreign countries. Cordis admitted, "The XB catheters have been sold domestically and internationally since 1994. The XB catheters were manufactured in Miami Lakes, from 1993 to 2001 and have been manufactured in Juarez, Mexico, since 2001." Cordis argued, however, that Voda could not assert infringement claims under foreign patent law because the court did not have jurisdiction over such claims. Which one of the important international legal principles discussed in this chapter would be most likely to apply in this case? How should the court apply it? Explain. [Voda v. Cordis Corp., 476 F.3d 887 (Fed.Cir. 2007)]
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How can a court objectively measure good faith and commercial reasonableness?
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CASE PROBLEM WITH SAMPLE ANSWER: Sovereign Immunity. When Ferdinand Marcos was president of the Republic of the Philippines, he put assets into a company called Arelma. Its holdings are in New York. A group of plaintiffs, refened to as the Pimentel class, brought a class-action suit in a U.S. district court for human rights violations by Marcos. They won a judgment of $2 billion and sought to attach Arelma's assets to help pay the judgment. At the same time, the Republic of the Philippines established a commission to recover property wrongfully taken by Marcos. A court in the Philippines was convened to determine whether Marcos's property, including Arelma, should be forfeited to the Republic or to other parties. The Philippine government, in opposition to the Pimentel judgment, moved to dismiss the U.S. court proceedings. The district court refused, and the U.S. Court of Appeals for the Ninth Circuit agreed that the Pimentel class should take the assets. The Republic of the Philippines appealed. What are the key international legal issues? [ Republic of the Philippines v. Pimentel, 553 U.S. 851, 128 S.Ct. 2180, 171 L.Ed.2d 131 (2008)]
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Review the UCC provisions that apply to the topics discussed in Chapters 19 through 22. Discuss fully how various UCC provisions, excluding the provisions discussed above, reflect social values and ethical standards.
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Robco, Inc., was a Florida arms dealer. The armed forces of Honduras contracted to purchase weapons from Robco over a six-year period. After the government was replaced and a democracy installed, the Honduran government sought to reduce the size of its military, and its relationship with Robco deteriorated. Honduras refused to honor the contract and purchase the inventory of arms, which Robco could sell only at a much lower price. Robco filed a suit in a federal district court in the United States to recover damages for this breach of contract by the government of Honduras. Using the information presented in the chapter, answer the following questions. Now suppose that the U.S. court hears the case and awards damages to Robco, but the government of Honduras has no assets in the United States that can be used to satisfy the judgment. Under which doctrine might Robco be able to collect the damages by asking another nation's court to enforce the U.S. judgment? DEBATE THIS: The U.S. federal courts are accepting too many lawsuits initiated by foreigners that concern matters not relevant to this country.
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On December 21, 1988, Pan Am Flight 103 exploded 31,000 feet in the air over Lockerbie, Scotland, killing all 259 passengers and crew on board and 11 people on the ground. Among those killed was Roger Hurst, a U.S. citizen. An investigation determined that a portable radio-cassette player packed in a brown Samsonite suitcase smuggled onto the plane was the source of the explosion. The explosive device was constructed with a digital timer specially made for, and bought by, Libya. Abdel Basset Ali Al-Megrahi, a Libyan government official and an employee of the Libyan Arab Airline (LAA), was convicted by the Scottish High Court of Justiciary on criminal charges that he planned and executed the bombing in association with members of the Jamahiriya Security Organization (JSO) (an agency of the Libyan government that performs security and intelligence functions) or the Libyan military. Members of the victims' families fi led a suit in a U.S. district court against the JSO, the LAA, Al-Megrahi, and others. The plaintiffs claimed violations of U.S. federal law, including the Anti-Terrorism Act, and state law, including the intentional infl iction of emotional distress. [ Hurst v. Socialist People's Libyan Arab Jamahiriya, 474 F.Supp.2d 19 (D.D.C. 2007)] (a) Under what doctrine, codified in which federal statute, might the defendants claim to be immune from the jurisdiction of a U.S. court? Should this law include an exception for "state-sponsored terrorism"? Why or why not? (b) The defendants agreed to pay $2.7 billion, or $10 million per victim, to settle all claims for "compensatory death damages." The families of eleven victims, including Hurst, were excluded from the settlement because they were "not wrongful death beneficiaries under applicable state law." These plaintiffs continued the suit. The defendants filed a motion to dismiss. Should the motion be granted on the ground that the settlement bars the plaintiffs' claims? Explain.
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Comity E L Consulting, Ltd., is a U.S. corporation that sells lumber products in New Jersey, New York, and Pennsylvania. Doman Industries, Ltd., is a Canadian corporation that also sells lumber products, including green hem-fir, a durable product used for home building. Doman supplies more than 95 percent of the green hem-fir for sale in the northeastern United States. In 1990, Doman contracted to sell green hem-fi r through E L, which received monthly payments plus commissions. In 1998, Sherwood Lumber Corp., a New York firm and an E L competitor, approached E L about a merger. The negotiations were unsuccessful. According to E L, Sherwood and Doman then conspired to monopolize the green hem-fir market in the United States. When Doman terminated its contract with E L, the latter filed a suit in a federal district court against Doman, alleging violations of U.S. antitrust law. Doman filed for bankruptcy in a Canadian court and asked the U.S. court to dismiss E L's suit, in part, under the principle of comity. What is the principle of comity? On what basis would it apply in this case? What would be the likely result? Discuss. [E L Consulting, Ltd. v. Doman Industries, Ltd., 360 F.Supp.2d 465 (E.D.N.Y. 2005)]
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Generally, the courts determine what constitutes "reasonable" behavior in disputes between contract parties over this issue. Should the UCC be more specific in defining what will be deemed reasonable in particular circumstances so that the courts do not have to decide the issue? Why or why not?
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