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International Marketing, 18e (Cateora)
Chapter 7 The International Legal Environment: Playing by the Rules
1) The form of law found in the United States and England is classified as civil or code law.
2) The form of law found in Germany, France, and Japan is called civil or code law.
3) Code law is based on an all-inclusive system of written rules of law.
4) Steps are being taken in common-law countries to codify commercial law, even though the
primary basis of commercial law is common law.
5) Common law prescribes specific patterns of social and economic behavior for everyone.
6) Code law prohibits the receipt and payment of interest on loans.
7) In Marxist–socialist societies, law is strictly subordinate to prevailing economic conditions.
8) The World Court can settle disputes between a company and a government.
9) When dealing with foreign countries, a marketer should refer to the laws of the home country
for guidance.
10) Disputes relating to commercial transactions must be settled in courts and cannot be settled
informally.
11) Statements made during conciliation may not be disclosed in subsequent litigation.
12) If conciliation is not used to settle a difference in an international business dispute or an
agreement cannot be reached, the next step is litigation.
13) The sole requirement of an arbitration clause is that the parties agree to abide by the awards
resulting from the process of arbitration.
14) One of the deterrents to litigation with respect to disputes in the international business arena
is the fear of creating a poor image and damaging public relations.
15) A certain level of piracy may be beneficial for some companies as it provides an unplanned
product trial.
16) Legal ownership in one country does not necessarily mean ownership in other countries.
17) The ownership of intellectual property rights in United States is established by prior use
rather than registration.
18) In many code-law countries, ownership of intellectual property rights is established by
registration rather than by prior use.
19) The General Agreement on Tariffs and Trade is the most comprehensive multilateral
agreement on intellectual property to date.
20) In the United States, a patent reverts to public domain if it is not manufactured and sold
within a specified period.
21) Charging what the market will bear is a suggested strategy for IP-rich firms to make money
in China.
22) The Internet is a libel-free zone.
23) The shipping companies collect taxes for products that are sold by a company through the
Internet to customers outside its home country.
24) The Informed Consumer Standard is used in the consumer protection courts in Canada and it
places the onus of making the right decisions on the buyer who is expected to have substantial
knowledge of the industry and its products.
25) The laws regulating direct selling in China are unusually detailed compared to others around
the world.
26) Global concern for the environment includes industrial pollution, hazardous waste disposal,
and rampant deforestation, but excludes issues that focus directly on consumer products.
27) Antitrust laws were not enforced in the United States during most of the twentieth century.
28) Moving a business outside the political boundaries of the home country exempts the
company from the home-country’s laws.
29) One purpose of antitrust enforcement in international commerce is to keep U.S. companies
from imposing restrictions on exports by other U.S.-based competitors.
30) Widgets, Inc. is beginning to export its products to Taiwan, but it isn’t sure if it needs a
license to do so. The responsibility of determining if a license is required rests with the
Taiwanese company that is purchasing the products.
31) __________ law is derived from English law and is practiced in the U.S..
A) Code
B) Common
C) Religious
D) Civil
E) Universal
32) Which form of law is primarily found in the United States, England, Canada, and other
countries once under English influence?
A) code law
B) common law
C) religious law
D) civil law
E) universal law
33) Code law is also known as ________ law.
A) business
B) common
C) religious
D) civil
E) universal
34) Germany’s legal system centers on code law, which is derived from ________ law.
A) English
B) Economic
C) Greek
D) Persian
E) Roman
35) The basis for ________ law is tradition, past practices, and legal precedents set by the courts
through interpretations of statutes, legal legislation, and past rulings.
A) civil
B) common
C) code
D) commercial
E) criminal
36) ________ law seeks “interpretation through the past decisions of higher courts which
interpret the same statutes or apply established and customary principles of law to a similar set of
facts.”
A) Constitutional
B) Family
C) Criminal
D) Civil
E) Common
37) Code law is based upon
A) the interpretation through the past decisions of higher courts.
B) the established and customary principles of law and their legal precedence.
C) an all-inclusive system of written rules of law.
D) the interpretation of the Koran.
E) the codes of English law that apply in all countries under English influence.
38) Under _______ law, the legal system is generally divided into three separate codes:
commercial, civil, and criminal.
A) constitutional
B) code
C) family
D) religious
E) traditional
39) Laws governing ________ offer the most striking differences between common-law and
code-law systems.
A) international trade
B) social welfare
C) homicide
D) intellectual property
E) domestic industry
40) Under common law, the ownership of intellectual property is established by
A) title deeds.
B) use.
C) tradition.
D) patent.
E) registration.
41) In code-law countries, the ownership of intellectual property is determined by
A) heredity.
B) nature of use.
C) duration of usage.
D) registration.
E) indemnification.
42) ________ is considered complete as a result of catchall provisions found in most of this type
of law systems.
A) Common law
B) Code law
C) Islamic law
D) Marxist–socialist tenets
E) The English legal tradition
43) Apart from intellectual property laws, an illustration of how fundamental differences in the
common and code systems can cause difficulty is in
A) conducting civil trials.
B) determining laws governing export and import.
C) deciding heredity laws.
D) determining criminal laws.
E) evaluating the performance of a contract.
44) What is true of code-law systems?
A) They represent a legal system that is not all-inclusive.
B) They establish ownership of intellectual property by prior use rather than registration.
C) They originate from tradition, past practices, and legal precedents set by the courts through
interpretations of statutes, legal legislation, and past rulings.
D) They sometimes fail to consider agreements to be enforceable unless properly notarized or
registered.
E) They fail to consider unforeseeable human acts such as riots as acts of nature.
45) The basis for ________ is the interpretation of the Koran.
A) common law
B) code law
C) Islamic law
D) Marxist–socialist tenets
E) legal tradition
46) Islamic law is also known as
A) Ulema.
B) Umrah.
C) Zakat.
D) Shari’ah.
E) Barakah.
47) The Islamic law prohibits the payment of
A) taxes.
B) profits.
C) interest.
D) equity.
E) leases.
48) According to ________, law is strictly subordinate to prevailing economic conditions, such
fundamental propositions as private ownership, contracts, due process, and other legal
mechanisms.
A) common law
B) code law
C) Islamic law
D) Marxist–socialist tenets
E) legal tradition
49) Because of political changes in the late twentieth century, which country has had to build
from scratch an entire commercial legal system?
A) France
B) Germany
C) Taiwan
D) Russia
E) Saudi Arabia
50) If there is a dispute between ________, the World Court can adjudicate.
A) governments
B) a company and a government
C) two companies
D) a citizen and a government
E) trade associations of two countries