Business Law Today Study Set 1

Business

Quiz 39 :
International Law in a Global Economy

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Quiz 39 :
International Law in a Global Economy

The principle of comity states that the jurisdiction of one nation defers to and gives effect to the foreign nation's laws and judicial decrees. Nations apply the principle of comity primarily to express courtesy and respect towards other nations' law and order. States honor each other's contracts, wills, deeds, and other legal obligations. Similarly, nations also attempt to honor the judicial decisions rendered in foreign nations when it is consistent with their national law and public policy.

Letters of credit is a written instrument in which the issuing bank agrees to pay the beneficiary (seller), in return, the account party (buyer) assures to reimburse the issuer for the payment made to the beneficiary after the beneficiary has complied with the terms of the letter. Letters of credit facilitate international transactions. No , the court should not compel the bank to pay the beneficiary. The letter of credit required goods to be transported by ship. Since the seller shipped the goods by air, the shipment was nonconforming. Thus, the bank was justified in dishonoring the letter of credit because the seller failed to comply with the terms specified in the letter.

(1) img , the Foreign Sovereign Immunities Act (FSIA) will preclude this suit as the private party here cannot make claims against a foreign nation on a contract made by a previous government. (2) img , the act of state doctrine will bar Mr R from enforcing the contract on the Country H as it believes in national sovereignty and freedom of action in its own territory. (3)The Act of State Doctrine will prevent Company R from seeking aid of the U.S. It makes clear that a country is free following its own rules in its own territory. (4)The U.S antitrust trust law under Section 1 of the Sherman Act can be used by Company R for seeking damages from the foreign country. This law can however only be used only in case where the U.S. commerce has been substantially harmed due to non-compliance of the contract.

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