Question 1

A contract involving the sale of goods from a Texas seller to a French wholesaler must always use the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Accepted Answer

While the CISG is widely used and recognized in international sales contracts, it is not mandatory and the parties can choose to opt out of it. Therefore, the Texas seller and French wholesaler could potentially use a different governing law or choose to exclude CISG from their contract if they both agree to it.

Question 2

The two principal requirements of the Foreign Corrupt Practices Act involve bribes and grease payments.

Accepted Answer

The Foreign Corrupt Practices Act (FCPA) primarily addresses bribery of foreign officials and requires accurate record-keeping and internal controls by companies. Grease payments, which are small payments to expedite routine government actions, are generally not prohibited under the FCPA.

Question 3

If the United States sets a limit on the number of cars that can be imported,this action is a form of tariff.

Accepted Answer

A limit on the number of cars that can be imported is a quota, not a tariff. A tariff is a tax on imports, while a quota restricts the quantity.

Question 4

The Presidents of Oxtron,Inc.,a U.S.company,and Dunka,Inc.a German company,met in Munich,Germany.Oxtron and Dunka are direct competitors in over-the-counter medicines.The presidents agree to fix prices on their major products.This agreement may violate U.S.antitrust law even though the agreement was made in Germany.

Accepted Answer

The agreement between Oxtron and Dunka to fix prices on their major products may violate U.S. antitrust law even though the agreement was made in Germany. Antitrust laws apply to U.S. companies and their actions both domestically and internationally. Therefore, if a U.S. company enters into an anticompetitive agreement with a foreign company, it may still be subject to U.S. antitrust enforcement.

Question 5

Multinational enterprises are companies doing business in several countries simultaneously.

Accepted Answer

Multinational enterprises (MNEs) are indeed companies that operate in multiple countries at the same time. These firms are also known as multinational corporations (MNCs) and have a significant impact on the global economy. They often have a complex organizational structure, with subsidiaries, affiliates, and joint ventures in different countries, and engage in a range of activities such as production, sales, marketing, research and development, and procurement. MNEs face various challenges related to cultural differences, legal and regulatory frameworks, political risks, and environmental and social responsibilities.

Question 6

Under European Union law,any agreement,contract,or discussion that distorts competition within European Union countries is illegal.

Accepted Answer

This statement is true. The EU has strict laws and regulations to prevent anticompetitive practices and encourage fair competition within its member countries. Such laws include the Treaty on the Functioning of the European Union (TFEU), which prohibits agreements or practices that restrict competition or abuse a dominant market position. Violations of these laws can result in severe fines and legal action.

Question 7

International comity holds that the courts of one nation lack the jurisdiction to hear suits against foreign governments.

Accepted Answer

International comity does recognize the principle of sovereign immunity, which is that foreign governments cannot be sued in the courts of another country without their consent. However, there are some exceptions to this principle, such as when a foreign government engages in commercial activity or when the case involves violations of international law. Therefore, it is possible for courts of one nation to hear suits against foreign governments in certain circumstances.

Question 8

Oxtron,Inc.,a U.S.company,and Leer,an Argentinean company,orally agreed to a contract under which Oxtron is to ship medical devices to Leer.The contract is governed by the CISG.Which statement is correct?

Accepted Answer

The CISG allows for the enforcement of oral contracts, so long as the essential terms of the agreement have been established. The fact that the contract involves medical devices does not affect its enforceability. Thus, the contract between Oxtron and Leer is enforceable without a written agreement.

Question 9

The United States and Argentina have signed the Convention on Contracts for the International Sale of Goods (CISG).Oxtron,Inc.,a U.S.company,and Leer,an Argentinean company,have entered into a contract under which Oxtron is to ship medical devices to Leer.The contract does not include a choice of law provision.The contract will be governed by:

Accepted Answer

Since both the United States and Argentina have signed the CISG, and the contract does not state a choice of law provision, the CISG will govern the contract for the international sale of goods between Oxtron and Leer. The UCC applies to domestic contracts within the United States, and domestic contract law of Argentina or the United States could potentially be in conflict with each other without a choice of law provision.

Question 10

The United States and Singapore have signed the Convention on Contracts for the International Sale of Goods (CISG).Notren,Inc.,a U.S.company,and SWT,a Singapore company,have entered into a contract under which SWT is to ship party supplies to Notren.One of the terms of the contract states,"The validity and performance of this contract will be governed by the Uniform Commercial Code (UCC)of the state of New York,not the Convention of the International Sale of Goods (CISG)." The contract will be governed by the:

Accepted Answer

The contract explicitly states that the UCC of the state of New York will govern the validity and performance of the contract, not the CISG. Therefore, the UCC will be the governing law and not the CISG, common law, or world trade law.

Question 11

The United States is the world's largest exporter of agricultural products.

Accepted Answer

According to the United States Department of Agriculture, the United States is the world's largest exporter of agricultural products.

Question 12

Generally,consumers are not adversely affected by tariffs since tariffs affect wholesale prices,not retail prices.

Accepted Answer

While tariffs may affect wholesale prices, these increased costs can lead to higher prices for imported goods at the retail level. In addition, if a country retaliates with their own tariffs, it can result in higher prices for domestically produced goods as well. Ultimately, tariffs can have a ripple effect on consumers through higher prices and decreased consumer purchasing power.

Question 13

The European Union is one of the world's most powerful regional associations with 42 member nations as of 2011.

Accepted Answer

The European Union had 27 member countries as of 2011, not 42.

Question 14

Trein,Inc.,a U.S.company entered into an exclusive distributorship agreement with Posty,Inc.,a Zambian company.This means that Trein will only use Posty to distribute products in Zambia.

Accepted Answer

The exclusive distributorship agreement means that Trein will only use Posty to distribute products in Zambia.

Question 15

For manufactured goods,the United States and European Union impose an average tariff of ________ percent,and major trading partners around the world impose tariffs of ________ percent for identical items.

Accepted Answer

According to the information given, the United States and European Union impose an average tariff of less than 4% for manufactured goods. Major trading partners around the world impose tariffs of 10 to 30% for identical items. Option B is the only choice that matches these criteria.

Question 16

It is not a violation of United States law for a domestic company to pay money to a foreign governmental official in order to obtain a contract with the foreign government if this type of "commission" is commonly paid in that foreign country.

Accepted Answer

The statement is incorrect. It is a violation of the Foreign Corrupt Practices Act (FCPA) for a domestic company to pay money or offer anything of value to a foreign government official for the purpose of obtaining or retaining business. The fact that the practice may be common in the foreign country does not exempt the company from compliance with U.S. law.

Question 17

Although the United States government officially signed the GATT treaty,the United States Congress has refused to ratify the agreement.

Accepted Answer

The United States Congress did ratify the GATT agreement, which led to the establishment of the World Trade Organization (WTO) in 1995.

Question 18

Ad valorem duty is based on the fair market value of the imported good as of the date it reaches the United States,not the price actually paid for the good when sold for export to the United States.

Accepted Answer

Ad valorem duty is typically based on the transaction value, which is the price actually paid or payable for the goods when sold for export to the United States, not the fair market value upon arrival.

Question 19

Axle Corporation imports goods into the United States.Who is required to pay the duty on the imported goods?

Accepted Answer

The importer, Axle Corporation, is required to pay the duty on the imported goods as per the customs laws of the United States. The duty is a tax levied on imported goods and is paid by the importer to the government. The World Trade Organization does not pay the duty, nor does the exporter of goods. There is no provision for each party to pay half the duty.

Question 20

Tariffs are generally higher in developing countries than in developed countries.

Accepted Answer

Developing countries often have higher tariffs in order to protect their domestic industries and generate revenue for their governments. Developed countries typically have lower tariffs as they have already established their industries and may focus on free trade policies.

Quiz 9: International Law