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1. International law attempts to reconcile the authority of each nation over
its own affairs with its desire to benefit from trade and harmonious
relations.
1. In a civil law system, the courts independently develop the rules
governing certain areas of the law.
1. In Islamic countries, the law is often influenced by the religious law of
Islam.
1. In a common law system, judicial precedents are not binding.
1. In a civil law system, the only official source of law is a statutory code.
1. The principle of comity is based primarily on an international treaty.
1. The act of state doctrine provides that only a head of state can make
treaties with another nation.
1. Expropriation occurs when a government seizes a private property for a
proper public purpose and awards just compensation.
1. Under the act of state doctrine, a firm whose assets a foreign gov-
ernment has expropriated may not recover compensatory damages in a
U.S. court.
1. The Foreign Sovereign Immunities Act broadly defines commercial
activity.
1. A foreign state is immune from the jurisdiction of U.S. courts unless the
state is involved in commercial activity within the United States.
1. Franchising is a form of licensing.
1. Many remedies are available for confiscation of property by a foreign
government.
1. Quotas are limits on the amounts of goods that can be imported.
1. Tariffs are taxes on exports.
1. Dumping is the exporting of environmentally polluting goods to a foreign
market.
1. The chief aim of the World Trade Organization and other trade
agreements is to maximize trade barriers among their members.
1. Antidumping duties are the responsibilities of international environmental
polluters.
1. A U.S. citizen can bring a civil suit in a U.S. court against a U.S.
entity for a tort allegedly committed overseas.
1. Generally, U.S. employers abroad must abide by U.S. discrimination
laws.
1. The government of Iran violates an international law. Persuasive tactics
to remedy the situation fail. The only recourse of other nations is to
a. approve the European Union’s enforcement of the law.
b. ask the International Court of Justice to enforce sanctions.
c. seek enforcement of the law through the United Nations.
d. take coercive action—sever relations, impose boycotts, go to war.
1. Global Properties, Inc. (GPI), a U.S. firm, owns property in Hong Kong.
The government in Hong Kong takes GPI’s property without paying for
it. A U.S. court will probably not examine the validity of this act
committed by China within its own territory, under
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the principle of comity.
d. the World Trade Organization .
1. Canada giving effect to the laws and court decisions of the United
States is an application of
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the principle of comity.
d. the World Trade Organization.
1. Sociedad Guarantia (SG), a Mexican firm, borrows $1 million from Tri-
national Bank, a U.S. firm. Later, SG files for bankruptcy under
Mexican law and asks the Mexican court to order the reimbursement of
payments on the loan. Tri-national files a suit against SG in a U.S.
court, arguing that the funds do not belong to SG.Refer to Fact Pattern
8-1B. The U.S. court in Tri-national’s suit is most likely to apply the
principle of comity because
a. the actions of foreign nations “taken in connection with commer-
cial activities” are exempt from the jurisdiction of U.S. courts.
b. the bankruptcy proceedings in the Mexican court appear to be
fundamentally fair and not in violation of U.S. public policy.
c. the courts of one country will not review the validity of acts by
the courts of another country within their own jurisdiction.
d. the nations of the world are constitutionally bound to honor the
actions of each others’ courts.
1. Sociedad Guarantia (SG), a Mexican firm, borrows $1 million from Tri-
national Bank, a U.S. firm. Later, SG files for bankruptcy under
Mexican law and asks the Mexican court to order the reimbursement of
payments on the loan. Tri-national files a suit against SG in a U.S.
court, arguing that the funds do not belong to SG.Refer to Fact Pattern
8-1B. Under the principle of comity, the U.S. court in Tri-national’s suit
is most likely to
a. ask the Mexican court to drop SG’s petition.
b. ask Tri-national to drop its suit.
c. dismiss Tri-national’s suit.
d. order the Mexican court to deny SG’s request.
1. Call Center Corporation, a U.S. firm, owns property in India. The
government of India seizes the property for a proper public purpose
and pays Call Center just compensation. This is
a. confiscation.
b. defalcation.
c. dumping.
d. expropriation.
1. Hemisphere Financial Corporation, a U.S. firm, files a suit against Italy
in a U.S. court. Italy claims foreign sovereign immunity. Under the
Foreign Sovereign Immunities Act, this claim is determined by
a. a neutral third-party court.
b. an international law court.
c. an Italian court.
d. the U.S. court in which the suit is filed.
1. WiFi Corporation, a U.S. firm, signs a contract with Bueno
Computadores, Ltd., an Argentinean firm, for a shipment and payment
for WiFi’s goods. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
1. UniOil, a U.S. firm, owns property in Venezuela. When the government
of Venezuela seizes the property, UniOil asks a U.S. court to order the
property’s return. The court rules that Venezuela is exempt from the
court’s jurisdiction. This is
a. a travesty of justice.
b. the act of state doctrine.
c. the doctrine of sovereign immunity.
d. the principle of comity.
1. Precision Motors Corporation (PMC), a U.S. firm, expands into
international markets through a joint venture. In this venture, PMC owns
a. all of the operation.
b. as much of the operation as PMC wants.
c. none of the operation.
d. part of the operation.
1. Expando Global Corporation, a U.S. firm, establishes a wholly owned
subsidiary firm in Germany. In this situation, Expando retains complete
ownership of
a. all of the facilities.
b. only those facilities in the United States.
c. none of the facilities.
d. less than half of the facilities.
1. Innovative Manufacturing Company, a U.S. firm, signs a contract with
Librador Corporacion, a Columbian firm, to give Librador the right to
use Innovative’s production processes. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
1. Eagle, Inc., a U.S. firm, contracts with Fong, Ltd., a Hong Kong firm,
allowing Fong to use and profit from Eagle’s patented products. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
1. Congresswoman Jones and other politicians want to prohibit the import
of certain agricultural products that pose a danger to domestic crops.
With respect to these products’ import, Congress can
a. do nothing.
b. impose quotas, but not tariffs.
c. impose tariffs, but not quotas.
d. prohibit the imports.
1. The government of Japan sets a limit on the amount of rice that can
be imported from the United States. This is
a. a dumping duty.
b. an antidumping duty.
c. a quota.
d. a tariff.
1. Vieux Carré S.A., a French firm, imports its goods into the United
States and offers those goods for sale at “less than fair value.” “Fair value” is
the price of Vieux Carré’s goods in
a. the Northern Hemisphere.
b. France.
c. the United States.
d. the world market.
1. Delphi, Ltd., imports appliances made in Southeast Asia into the United
States. To obtain a larger share of the U.S. market, Delphi sells the
appliances at lower prices here than in its exporting countries. With
respect to these imports, the United States may
a. do nothing.
b. assess antidumping duties.
c. order the return of the appliances to the exporting countries.
d. confiscate the appliances without just compensation.
1. The United States and other members of a certain organization agree
to grant normal trade relations (NTR) status on each other with regard
to imports and exports. This organization is
a. the Convention on Contracts for the International Sale of Goods.
b. the International Export-Import Bank.
c. the United Nations.
d. the World Trade Organization.
1. Two Japanese firms—Mikato, Ltd., and Shuzushi, Ltd.—enter into a joint
venture in an attempt to increase their market share of the U.S. auto
market. A U.S. court could exercise jurisdiction over the firms
a. if the joint venture has a substantial effect on U.S. commerce.
b. if the joint venture has any effect on U.S. commerce.
c. if the joint venture was entered into in the United States.
d. under no circumstances.
1. Fabiola, Gabriella, or any foreign citizen, can bring a civil suit in a U.S.
court
a. for a violation of a treaty of the United States only.
b. for a violation of a treaty of the United States or the law of
nations.
c. for a violation of the law of nations only.
d. under no circumstances.
1. Savory Cooking Sauces, Inc., a U.S. business firm, makes and sells
distinctively flavored cooking sauces. Although the recipes are secret,
the ingredients could be revealed and the sauces could be
reconstructed with diligent efforts. What can Savory do to prevent its
products from being “decoded” and pirated abroad?
1. The management of Sportz Shoes Corporation, a U.S. firm, wants to
expand into foreign investment and employment markets. They are
considering either opening their own production facility in a foreign
country or entering into a licensing agreement with a foreign firm. What
are the advantages and disadvantages of each of these courses of
action?
