International Business Law 6th Edition

INTRODUCTION TO INTERNATIONAL AND COMPARATIVE LAW 1 I. Text Materials What is International Law? The term international law applies to any conduct outside the boundaries of states, whether of a public or a private nature. International law deals with three kinds of international relationships: (1) those between states and states, (2) those between states and

The Rights of Individuals Under International Law International law looks upon individuals in two different ways: (1) it ignores them or (2) it treats them as its subjects. The traditional view is to ignore them. Even though individuals have no direct rights according to the traditional view, they do have derivative

Sales 10 I. Text Materials United Nations Convention on Contracts for the International Sale of Goods The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) came into force January 1, 1988, climaxing more than 50 years of negotiations. CISG is organized in four parts: Part I (Articles 113) contains the

The Passing of Risk The loss of goods through fire, theft, or other means can occur at any time: prior to delivery, during transit or inspection, or after delivery. The legal concept of passage of risk determines who is responsible for the loss. In most cases, the loss will be covered by

Transportaon 11 I. Text Materials Trade Terms Sales contracts involving transportation customarily contain abbreviated terms describing the time and place where the buyer is to take delivery. The trade terms may also define a variety of other matters, including the time and place of payment, the price, the time when the risk of loss

Case 11-5: Croft & Scully Co. v. M/V Skulptor Vuchetich et al. United States, Court of Appeals, Fifth Circuit, 1982. United States, Court of Appeals, Fifth Circuit, 1982. United States, Court of Appeals, Fifth Circuit, 1982. Facts: Shippers Stevedoring (SS), a stevedoring company in the employment of Baltic Shipping, negligently dropped several containers

Financing 12 I. Text Materials Introduction International financing encompasses the financing of foreign trade and the underwriting of investments in foreign countries. Foreign trade financing is primarily concerned with how goods and services are paid for across international borders. Long-standing mechanisms for expediting international trade include bills of lading, bills of exchange, and letters

Applying for a Letter of Credit In most cases, a person who needs a letter of credit must apply to a bank with which he has an existing relationship. In all cases, a Letter of Credit Application must be completed. The application is not an application for credit, but rather

State Responsibility and Environmental Regulaon 2 I. Text Materials Introduction It has long been a basic principle of international law that a state that causes an injury to a foreign citizen (national) is responsible to the nationals state for the harm done, but not to the national. This responsibility follows from the basic idea of

Insurance Insurance is the contractual commitment by an insurer to indemnify an insured against specific contingencies and perils. Both domestically and internationally, insurance is an important business tool that can either supplement or take the place of litigation. Private Insurers A variety of insurance products for multinational enterprises are available from private

Dispute Selement 3 I. Text Materials Settlement of Disputes Through Diplomacy Diplomacy is the process of getting parties to a disagreement to an understanding through negotiation, mediation, or inquiry. The word diplomacy is formally applied only to disputes between states, but the same processes can be applied to disputes involving institutions and individuals as

Immunities of States from the Jurisdiction of Municipal Courts Sovereign states are immune from the jurisdiction of foreign courts (1) when they engage in activities anywhere in the world that are unique to sovereigns and (2) when they act officially within their own territory. Sovereign or State Immunity The doctrine of sovereign

The Mulnaonal Enterprise 4 I. Text Materials Introduction Any business wishing to globalize has a number of choices, ranging from relatively little presence in foreign nations (licensing intellectual property, exporting, importing, franchising) to more intense involvement in legal entities formed in foreign nations (joint ventures, general partnerships, limited partnerships, corporations, and limited liability companies). Multinational

Case 4-5: World-Wide Volkswagen v. Woodson United States Supreme Court, 1980. United States Supreme Court, 1980. United States Supreme Court, 1980. Facts: The Robinsons bought a new Audi from Seaway Volkswagen in New York state. While traveling through the State of Oklahoma, the Audi was rear-ended, causing a fire which severely burned Mrs.

Foreign Investment 5 I. Text Materials Foreign Investment Laws and Codes Foreign investment involves ownership by one person (an individual, a partnership, business organization, or government entity) of 10 percent or more of the controlling interest in an enterprise not located in the persons home country. The regulations governing foreign investments are commonly set out

Supervision of Foreign Investment Start-Up Standards The foreign investor whose application has been approved by the host state is usually subject to some time limit in which to start construction and/or begin operation. Most countries require investors to submit periodic reports during the start-up period that describe their progress in importing capital

Money and Banking 6 I. Text Materials The worlds money and banking system is neither coherent nor well organized. In the absence of a convenient set of laws or regulations, custom and practice regulate much of it. The system is highly informal. On the international plane, its players include national institutions governed by national

National Monetary Systems National Monetary Organizations There are three types of organizations that operate on the national plane to implement national monetary policies. At the highest level is a political agency of the national government that sets national fiscal policy and carries on the financial functions of the government. In most countries, this

Trade in Goods 7 I. Text Materials History of Contemporary International Trade Law International trade has grown dramatically in the past 60 years. In great measure, this is because the worlds nations have cooperated in eliminating protectionist domestic legislation and in promoting the free exchange of goods. The several GATT treaties, the EU, the WTO,

Multilateral Trade Agreements In addition to GATT 1994, there are 13 other Agreements on Trade in Goods annexed to the WTO Agreement: Nine of these deal with regulatory matters; two are sectoral agreements that extend GATT to certain types of goods not covered under GATT 1947; one is a program to devise

WTO Import Restrictions 2. Students answers may vary. Some may suggest that State K may apply safeguard measures. Safeguards are emergency actions that a WTO member state may take to protect its domestic industries from serious injury from a sudden increase in the quantity of an imported product. 3. Students answers may

Services and Labor 8 I. Text Materials Introduction The rules on services are now found principally in the General Agreement on Trade in Services and in the agreements creating certain regional economic organizations such as the EU and the North American Free Trade Area. The rules governing labor are to be found in the international

II. Chapter Questions Allowable WTO Restrictions 1. Students answers may vary. No restrictions may be applied by member states to international transfers and payments for current transactions. Nevertheless, restrictions may be adopted or maintained if a member state suffers serious balance-of-payments difficulties, especially if the member is developing or is in transition

Intellectual Property 9 I. Text Materials Introduction Intellectual property is useful information or knowledge. It is divided into two principal branches: artistic property and industrial property. Artistic property encompasses artistic, literary, and musical works. These are protected, in most countries, by copyrights and neighboring rights. Industrial property is itself divided into two categories: inventions and trademarks.

International Intellectual Property Organizations Two main international organizations take an active role in defining and protecting international intellectual property rights: the World Intellectual Property Organization (WIPO) and the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) of the World Trade Organization. World Intellectual Property Organization (WIPO) WIPO is responsible for

Sales and Distribution Arrangements A sales or distribution arrangement limits a licensees freedom to organize its distribution system independently of the licensor. There are three basic approaches to the regulation of these agreements. One group of developing countries prohibits any interference by the licensor in the licensees distribution system. A

1) If an offer is oral, the acceptance must be made immediately, unless the circumstances indicate otherwise. Answer: True Answer: True Answer: True 2) The IMFs unit of account is the SDR. Answer: True Answer: True Answer: True 3) A representative office does not directly conduct business for the parent company. Answer: True

1) The NAFTA provides MFN provisions for trade in services sectors. Answer: True Answer: True Answer: True 2) Forum non conveniens originated from Scottish Common Law. Answer: True Answer: True Answer: True 3) A bill of exchange that is payable at a definite future time is known as a sight bill. Answer: False

1) The common law requires a note to contain the words promissory note. Answer: False Answer: False Answer: False 2) A patent pool is an agreement to exchange licenses. Answer: False Answer: False Answer: False 3) The insurance policy represents the cost element of a contract. Answer: False Answer: False Answer: False 4)

1) Inventions and trademarks are types of artistic property. Answer: False Answer: False Answer: False 2) A charter is a document outlining the principles, functions, and organization of a juridical entity. Answer: True Answer: True Answer: True 3) The requirement for a person to exhaust remedies cannot be waived by treaties. Answer: False

1) Bearer securities are transferred simply by delivery of the certificate. Answer: True Answer: True Answer: True 2) The exhaustion-of-rights doctrine states that once a good made or sold under license is in circulation, the licensor has no further right to control its distribution. Answer: True Answer: True Answer: True 3) Under

1) Common law is the legal system of England and countries that were once English colonies. Answer: True Answer: True Answer: True 2) In an option contract, if the right is to buy a commodity, the option is known as a call. Answer: True Answer: True Answer: True 3) CISG deals with

1) A charterparty is a contract for the hire of an entire ship for a particular voyage or a set period of time. Answer: True Answer: True Answer: True 2) In civil law countries, a vessel is regarded as a juridical person separate and apart from its owner. Answer: False Answer: False

1) Depository receipts are non-negotiable instruments. Answer: False Answer: False Answer: False 2) The Convention Relating to a Uniform Law on the International Sale of Goods (ULIS) supersedes the United Nations Convention on Contracts for the International Sale of Goods (CISG). Answer: False Answer: False Answer: False 3) An actionable subsidy is

1) The United Nations Framework Convention on Climate Change (UNFCCC) was adopted at the Stockholm Declaration. Answer: False Answer: False Answer: False 2) A companys service office in a host nation would be considered a branch of the company. Answer: True Answer: True Answer: True 3) The IMF was created immediately after

1) The World Intellectual Property Organization is responsible for administering the Paris and Berne Conventions. Answer: True Answer: True Answer: True 2) Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored. Answer: True Answer: True Answer: True 3) Any reference to some other agreements

1) In the marine insurance industry, a free from particular average policy provides more protection than a with average policy. Answer: False Answer: False Answer: False 2) The WTOs dispute settlement process is governed by an agreement known as the General Agreement on Tariffs and Trade. Answer: False Answer: False Answer: False 3)

1) Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services. Answer: False Answer: False Answer: False 2) Regulation 1612/68 limits the right of a worker to take

1) The Kennedy Round produced an agreement on anti-dumping. Answer: True Answer: True Answer: True 2) A holding company is a branch that in turn owns other branches. Answer: False Answer: False Answer: False 3) The Tokyo Round led to the establishment of the World Trade Organization. Answer: False Answer: False Answer: False

1) The Overseas Private Investment Corporation (OPIC) only operates as an insuring agency for companies investing in less developed countries. Answer: False Answer: False Answer: False 2) Article 82 of the European Community Treaty does not have an exception clause. Answer: True[/cpmembership] Answer: True[/cpmembership] Answer: True[/cpmembership] 3) The president of the Bank

1) The GATS provides a provision for a departure from the principle of national treatment to ensure that direct taxes may be effectively collected on services. Answer: True Answer: True Answer: True 2) A blocking statute makes it easier for a successful plaintiff to enforce a U.S. judgment outside the United

1) A national multinational enterprise is the one in which a parent firm established in one country establishes wholly owned branches and subsidiaries in other countries. Answer: True Answer: True Answer: True 2) The doctrine of imputability does not make the state liable for an act of terrorism committed by its

1) A business that grants licenses to a foreign national or foreign business entity is not a multinational enterprise. Answer: True Answer: True Answer: True 2) Multilateral Trade Agreements of the WTO Agreement are binding on all members of the WTO. Answer: True Answer: True Answer: True 3) The OPIC limits its

1) The doctrine used by common law courts to refuse jurisdiction is called forum non conveniens. Answer: True Answer: True Answer: True 2) The UNFCCC divides its member countries into two main groups, Annex I countries and non-Annex I countries. Answer: True Answer: True Answer: True 3) Adoption of the precautionary approach

1) The IMFs Articles of Agreement requires a member to buy its own currency from other members who have acquired it as the result of current transactions. Answer: True Answer: True Answer: True 2) A partial loss is known in the marine insurance industry as a particular average. Answer: True Answer: True