International Commercial Law
Chapter Exam Questions
Course Introduction
International Commercial Law explores the legal frameworks governing international business transactions, focusing on the key principles, rules, and institutions that regulate commerce between nations. The course examines international sales of goods, contracts, dispute resolution mechanisms such as arbitration and litigation, and the roles of major conventions like the United Nations Convention on Contracts for the International Sale of Goods (CISG). Students will analyze case studies and treaties to understand cross-border commercial practices, risks, and regulatory challenges, equipping them with the knowledge to navigate the complexities of global trade and manage legal issues arising from international commercial relationships.
Recommended Textbook
International Business Law and Its Environment 8th Edition by Richard Schaffer
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Chapter 1: Introduction to International Business
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Q1) A host country refers to the country under whose laws the investing corporation was created or is headquartered.
A)True
B)False
Answer: False
Q2) The three forms of international business are exporting,importing,and licensing.
A)True
B)False
Answer: False
Q3) Indirect exporters commonly employ the services of export trading companies and export management companies.
A)True
B)False
Answer: True
Q4) Which of the following does not generally characterize foreign distributors?
A) They are independent firms.
B) They are usually located in the country from which the goods are exported.
C) They assume the risks of warehousing the goods.
D) The often trail end users of the product.
Answer: B
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Chapter 2: International Law and the Worlds Legal Systems
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Q1) A nation can be brought before the World Court whether or not it wants to be there.
A)True
B)False
Answer: False
Q2) Jurisdiction over a case in the World Court is:
A) Compulsory on all nations.
B) Unlimited on all nations except communist.
C) Elective on the part of each nation.
D) Both A and B.
Answer: C
Q3) The forum for public international law disputes is:
A) The World Forum.
B) International Court of Justice.
C) The League of Nations.
D) The Hague.
Answer: B
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Chapter 3: Resolving International Commercial Disputes
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Q1) Many factors must be considered in choosing binding arbitration.All of the following should be considered except:
A) Cost.
B) Speed.
C) Enforceability.
D) Complexity.
Answer: D
Q2) The Due Process clause of the U.S.Constitution requires that before a company can be brought before a court in the U.S.it must have had minimum contacts with the forum.
A)True
B)False
Answer: True
Q3) One popular form of dispute settlement is arbitration.This is defined as:
A) Rules in admissibility of evidence.
B) Submission for determination of the disputed matter to a private unofficial person selected by agreement.
C) Interlocutory determination by a judge.
D) None of the above.
Answer: B
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Chapter 4: Sales Contracts and Excuses for
Nonperformance
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Q1) Scenario
A claim by a German buyer against an American seller alleging the seller's failure to perform an oral agreement relating to a sale of goods valued at U.S.$10,000.
Q2) Draft a CISG article that addresses the interpretation of "bi-lingual" contracts.
Q3) Identify at least 10 dissimilarities between the CISG and the UCC and/or U.S.common law.
Q4) Eastern Airlines contracted with Gulf Oil for a supply of jet fuel.An oil embargo resulted in a 400 percent increase in the price of oil.Gulf demanded a price increase from Eastern.Eastern sued to ensure its supply of oil at the contract price.The result in court was:
A) That Eastern won because Gulf should have foreseen this situation.
B) Gulf won due to commercial impracticability.
C) That Eastern lost because a 400 percent increase is too much of a hardship for Gulf.
D) None of the above would be the court's decision in this situation.
Q5) Draft a model statute regarding international e-contracts (perhaps considering rules for offer,acceptance,and revocation).
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Chapter 5: The Documentary Sale and Terms of Trade
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Q1) The difference between terms "CFR" and "CIF" is that under "CIF" term of sale,the buyer must procure his own marine insurance coverage on the goods.
A)True
B)False
Q2) According to Incoterms,the trade term that represents the maximum responsibility of the seller is:
A) Carriage and Insurance Paid To.
B) Delivered Duty Paid.
C) Ex Works.
D) Delivered at Frontier.
E) None of the above.
Q3) Bills of lading are negotiable instruments but cannot be used as collateral for an outstanding debt.
A)True
B)False
Q4) Under an FOB contract,the bill of lading need not be market "Freight Prepaid."
A)True
B)False
Q5) Draft a bill of lading.
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
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Q1) What are the differences and similarities between a freight forwarder and a non-vessel operating common carrier and the relative benefits of using each?
Q2) In the context of shipping goods,the bailor is the shipper who places goods in the hands of a common carrier,the bailee,for transport to a consignee.
A)True
B)False
Q3) If goods are sacrificed in the process of saving a ship from a substantial common danger,the owners of the goods are said to have incurred a particular average loss.
A)True
B)False
Q4) Draft a sample of bill of lading,ensuring that you have addressed the concerns in Z.K.Marine.
Q5) Revise an insurance policy for carriage to make it more beneficial to the insured.
Q6) After reviewing the sample international air waybill and marine cargo insurance policy in the text,note any problems or issues that may not be adequately addressed in these documents.
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Chapter 7: Bank Collections, Trade Finance, and Letters of Credit
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Q1) Terms of the sales contract must be reflected in the letter of credit,if not the buyer must clear all discrepancies upon examination of the letter of credit.
A)True
B)False
Q2) The risk of loss due to the default of the buyer based on his or her inability to pay is known as:
A) Commercial risk.
B) Compensatory risk.
C) Default risk.
D) Currency risk.
Q3) A letter of credit whose payment is assured by two banks is a(n):
A) Confirmed Letter of Credit.
B) Irrevocable Letter of Credit.
C) Letter of Credit with Stipulations.
D) Standby Letter of Credit.
Q4) Draft a specialized letter of credit,recalling some of the uses noted in the text.
Q5) In what ways does countertrade resemble and differ from back-to-back letter of credit financing?
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Chapter 8: National Lawmaking Powers and the Regulation
of Ustrade
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Q1) Under the Constitution,a treaty is considered:
A) "Non-binding and discretionary."
B) "Unenforceable."
C) "Law of the Land."
D) None of the Above.
Q2) The United States Trade Representative is:
A) A cabinet level post reporting directly to the president that carries on trade negotiations for the U.S.
B) The one that administers the Bureau of Customs and Border Protection.
C) The one that represents the U.S. at all GATT meetings.
D) Both A and C.
E) Both B and C.
Q3) A treaty is an agreement or contract between two or more nations that is recognized and given effect under international or domestic law.
A)True
B)False
Q4) (This may require outside research.)Compare and contrast the provisions of at least two U.S.FCN Treaties.
Q5) Weigh the relative merits and detriments of FCN treaties.
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Chapter 9: Gatt Law and the World Trade Organization:
Basic Principles
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Q1) Countries A,B,and C belong to GATT.Countries X and Y do not.A has a 7% tariff on televisions from B.C,X,and Y also export televisions.Under unconditional most-favored-nation trade of GATT:
A) Countries C, X, and Y are entitled to a 7% tariff on televisions.
B) Countries X and Y are entitled to a 7% tariff on televisions.
C) Country C must petition A under GATT to get a 7% tariff on televisions.
D) Country C gets an automatic 7% tariff rate on televisions.
Q2) Explain the similarities and differences between "like products" and "directly competitive products."
Q3) Other examples of nontariff trade barriers include exchange control on currencies,performance standards,and foreign customs procedures.
A)True
B)False
Q4) Although the 1947 GATT was never ratified by the U.S.Congress,it was considered legally binding in the United States under international law.
A)True
B)False
Q5) Compare and contrast unconditional and conditional MFN trade.
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Chapter 10: Laws Governing Access to Foreign Markets
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Q1) Restrictions a nation places on foreign investment that adversely affect trade in goods or services are called:
A) Trade restrictions.
B) Trade-related investment measures.
C) Tariffs.
D) Foreign interest restrictions.
Q2) Under Section 301,the United States Trade Representative has the discretion to take retaliatory trade action in all the following cases except:
A) When a country permits forced labor.
B) When a country fails to allow workers the right to organize and bargain collectively.
C) When a country has denied the U.S. its rights under any of the GATT agreements.
D) When a country fails to provide standards for minimum wage.
Q3) Special 301 is used against countries that fail to protect U.S.intellectual property rights.
A)True
B)False
Q4) Compare and contrast unilateralism with bilateralism.
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Chapter 11: Regulating Import Competition and Unfair Trade
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Q1) Under U.S.law,a petition for import relief may be filed with the International Trade Commission by any firm,trade association,union,or group of workers.
A)True
B)False
Q2) Identify and evaluate the importance of the several factors taken into account in an ITC proceeding to impose import restrictions.
Q3) Quotas are not permitted under GATT or under U.S.law as a method of protecting domestic industries.
A)True
B)False
Q4) Describe the ways in which U.S.trade legislation is and is not based upon GATT legal principles.Give several examples.
Q5) Global quotas are quantitative import restrictions on a particular product regardless of its country of origin.
A)True
B)False
Q6) What are the similarities and differences between unfair trade and fair,but economically damaging trade?
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Chapter 12: Imports, Customs, and Tariff Law
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Q1) The principal use of an article refers to:
A) The purpose for which it is to be imported.
B) The use that is greater than any other single use of the article.
C) The use of the components once they are fully assembled.
D) Any one of the above.
Q2) Where an imported item could be classified under several different provisions of the Harmonized Code,it will generally fall under that provision which describes the item most specifically.
A)True
B)False
Q3) The owner,purchaser,or consignee of goods or a customs broker with a written power of attorney must enter goods delivered to a U.S.port of entry within five days of the arrive of the goods.
A)True
B)False
Q4) Under the Harmonized Tariff Schedule,all countries charge the same rate of duty upon the import of the same or similar products.
A)True
B)False
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Chapter 13: The Regulation of Exports
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Q1) EPCI controls were instituted to stem the flow of currency to the third world countries.
A)True
B)False
Q2) Which of the following statements is not true?
A) U.S. export control law requires the issuance of an export license to cover the movement of controlled U.S.-origin products from India to Taiwan.
B) The Department of Commerce will not recommend the decontrol of a product on grounds that a non-U.S. item of comparable quality is available rendering the control ineffective.
C) The Bureau of Industry and Security has 90 days to review and rule on the application of an export license.
D) Civil penalties may be imposed on a strict liability basis for violations of export control law without having to prove criminal intent.
Q3) Items that are not classified on the Commerce Control List may be exported without an in individual export license.
A)True
B)False
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Chapter 14: North American Free Trade Law
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Q1) A customs union is:
A) A group of customs laws intended to reduce tariffs and stimulate trade.
B) A free trade area with a common external tariff.
C) A free trade area with no tariffs between the member nations.
D) A union of nations that promotes lower tariffs for international trade.
E) None of the above.
Q2) Goods that may not contain any non-North American parts or materials in order to obtain NAFTA tariff rates include:
A) Minerals mined in North America.
B) Vegetables grown in North America.
C) Live animals born and raised in North America.
D) Scrap derived from production in North America.
E) All of the above.
Q3) NAFTA's national treatment principle states:
A) All goods claiming to be from a country must be produced in that country.
B) All products from a country must have the same amount of tariffs placed on them.
C) All imports from a NAFTA country must be treated like similar domestically produced goods.
D) All exports from a NAFTA country must meet certain quality standards.
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Chapter 15: The European Union and Other Regional Trade Areas
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Q1) The Commission of the European Union consists of twenty members.
A)True
B)False
Q2) The Treaty of Lisbon prevented member states from leaving the EU.
A)True
B)False
Q3) The Four Freedoms include free movement of goods,services,capital and people.
A)True
B)False
Q4) The EU Commission coordinates the following areas:
A) Fisheries.
B) Monetary affairs.
C) Social policy.
D) A, B, and C.
E) A and B only.
Q5) The signing of the European Economic Community Act officially formed the European Community.
A)True
B)False
Q6) Compare and contrast EU directives with regulations,giving examples of each. Page 17
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Chapter 16: International Marketing Law: Sales Representatives,
Advertising, and Ethical
Issues
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Q1) An independent agent is often characterized by which of the following:
A) Principal is involved in working out details of the agent's work organization.
B) The agent is always subject to a change in instructions.
C) The agent works for many clients.
D) The agent is paid on an hourly or salaried basis.
E) All of the above.
Q2) Only payments in excess of $5,000 are subject to criminal prosecution under the FCPA.
A)True
B)False
Q3) A principal who hires an independent agent within a host country is viewed as having opened an office and is then subject to the host country's tax laws.
A)True
B)False
Q4) Most American lawyers can give competent advice on foreign advertising laws.
A)True
B)False
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Chapter 17: Licensing Agreements and the Protection of Intellectual Property Rights
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Q1) TRIPS was the result of intensive negotiations during the so-called Tokyo Round of GATT talks and provided increased protection for IPRs during the 1980s.
A)True
B)False
Q2) Restrictions written into the franchise agreement must be strictly adhered to regardless of the effects it may have on the competitive potential of the franchisee in the host country.
A)True
B)False
Q3) Compare and contrast TRIPS with IPR in the U.S.or another country (for example,India).
Q4) The importation of foreign-made trademarked merchandise into the U.S.for sale in competition with the U.S.trademark owner's own merchandise made in the U.S.is referred to as:
A) Copycat competition.
B) Gray marketing.
C) Reverse trade advantage.
D) Black marketing.
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Chapter 18: Takings and National Controls on Foreign Direct Investment
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Q1) Weigh the relative benefits of political risk insurance from government agencies and private insurers.
Q2) Americans have begun to offer their securities to investors abroad through:
A) The New World Stock Exchange.
B) Standard and Poor's.
C) The Black Market.
D) The Euroequity Market.
Q3) Compare and contrast different types of passive investments and the risks and benefits associated with each.
Q4) As a general rule,firms are responsible for the torts committed by their foreign subsidiaries but not by their foreign branch offices.
A)True
B)False
Q5) An American firm that builds a factory abroad for the building of component parts to be shipped back to the United States does not qualify for OPIC insurance.
A)True
B)False
Q6) Compare and contrast the traditional and modern traditional theory of takings.
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Chapter 19: Labor and Employment Discrimination Law
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Q1) In Japan,union leadership is a stepping stone to management.
A)True
B)False
Q2) The European Union treaties do not address discrimination on the grounds of nationality.
A)True
B)False
Q3) Europeans tend to feel that over a period of time,employees acquire a property interest in their jobs.
A)True
B)False
Q4) Compare and contrast the employee discharge laws in the U.S.with those in Germany.
Q5) Workers in the United States acquire a property interest in their jobs such that severance pay is an entitlement to compensate for property taken upon dismissal from the position.
A)True
B)False
Q6) Draft a covenant identifying international standards regarding discrimination in employment.
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Chapter 20: Environmental Law
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Q1) Address the strengths and weaknesses of the U.S.government's environmental polices pertaining to pesticides (such as those addressed by the never-adopted ban on the export of unsafe pesticides).
Q2) In what ways are regional environmental treaties superior to global treaties? Inferior to them?
Q3) One dispute resolution mechanism used frequently in international disputes over the environment is binding adjudication.
A)True
B)False
Q4) Which of the following laws regulate the export of hazardous materials?
A) GATT.
B) TOSCA.
C) FIFRA.
D) A and B.
E) B and C.
Q5) The real purpose of U.S.corporate average fuel economy standards was to make it difficult for Japanese luxury cars to compete in the U.S.market.
A)True
B)False
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Chapter 21: Regulating the Competitive Environment
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Q1) Article 85 of the Treaty of Rome is similar to Section 1 of the U.S.Sherman Act in prohibiting concerted anticompetitive conduct in very general terms.
A)True
B)False
Q2) Knowledgeable that Canada,Germany,and the UK have enacted blocking legislation,craft a treaty on this issue.How might the different interests of these countries and partnerships (or lack thereof)with them affect any treaty? Students may also wish to read Laker Airways v.Sabena,Belgian World Airlines,731 F.2d 909 (D.C.Cir.1984)for further background).
Q3) The European Union's enforcement agency in antitrust matters,which is analogous to the U.S.Federal Trade Commission and Justice Department,is the:
A) Commission of the European Union.
B) European Enforcement Agency.
C) European Antitrust Task Force.
D) None of the above.
Q4) Antitrust law in the European Union is known as competition law.
A)True
B)False
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