Deck 9: Comparative International Contract Law

Question 1

At the international level, the general principles of contract law are harmonized and highly specific.

Answer 1

False

Question 2

Traditionally, the Japanese view the contract as the operative tool for ensuring full and complete performance and something that should be honored at any costs to the other party.

Answer 2

False

Question 3

Cultural differences may play a significant role in the negotiation and formation of an international contract.

Answer 3

True

Question 4

Arbitration is the preferred method of dispute resolution in Japan.

Question 5

Due to the tremendous similarities among the different legal systems in how the law supports commercial transactions, there are few problems with international sales contracts.

Question 6

Under English and U.S. common law, a negotiating party has a pre-contractual obligation to act in good faith towards the other party.

Question 7

Promissory estoppel allows the courts to stop performance of a contract if there is a conflict between a pre-contractual oral promise and the written contract.

Question 8

Promissory estoppel is available to a party to recover expenses incurred before the making of a promise.

Question 9

A civil law system is more likely to view comfort instruments as legally enforceable obligations than the common law legal system.

Question 10

According to the contra proferentem rule, ambiguity in contractual language is construed adversely against the writer or drafter.

Question 11

Under Dutch law, parties to a negotiation have a pre-contractual obligation to refrain from negotiating with third parties.

Question 12

German law allows for liability for bad faith negotiation even after the contract has been concluded.

Question 13

Under the doctrine of culpa in contrahendo, a court has the authority to award reliance damages but not expectancy damages.

Question 14

The lex mercatoria refers to business customs or trade usage developed by businesspersons throughout the world in order to facilitate business transactions.

Question 15

Under the civil law system, failure to respond to a letter, request, or other business writing is often regarded as evidence of assent to its terms.

Question 16

The standard of review that American courts use in interpreting contracts is embedded in the reasonable person approach.

Question 17

The concept of penal clauses in European contracts is equivalent to the U.S. concept of liquidated damages.

Question 18

Courts in the U.S. and in the member states of the Council of Europe may void clauses in a contract that set excessive or unreasonably large damages in case of a breach.

Question 19

The Russian Civil Code places strong emphasis on formalities including the written from, notarial certifications, and in some cases, governmental registration.

Question 20

Under the Chinese Foreign Economic Contracts Law, oral contracts are enforceable in certain circumstances.

Question 21

The European Principles of Contract Law hold that contracts need not be in writing and may be proven by any means, including witnesses.

Question 22

Under common law, a contract is formed at the time the acceptance is received.

Question 23

The European Principles state that notice for non-performance becomes effective upon dispatch.

Question 24

A circular or advertisement is generally not construed as a standing offer under the European Principles.

Question 25

Under the European Principles, the perfect tender rule allows the buyer of non-conforming goods to reject those goods.

Question 26

The European Principles and CISG allow a buyer of non-conforming goods to unilaterally reduce the price paid for the goods based on the diminution of value due to the non-conformity.

Question 27

A standard merger clause in a contract will always be enforced under the rules of the European Principles.

Question 28

Specific performance is a remedy for breach of contract in which the breaching party is required to pay a certain sum of money.

Question 29

Specific performance is not a remedy for breach of contract under the Uniform Commercial Code unless the suing party can show that the goods are unique.

Question 30

The UNIDROIT Principles are similar to U.S. law in that they do not assign any pre-contractual liability to parties during negotiations.

Question 31

Domestic sales contracts in the U.S. are controlled by the body of law known as:

A) Convention on the International Sale of Goods
B) Uniform Commercial Code
C) Domestic Contract Code
D) Uniform Contract Code

Question 32

The almost universal adoption of the International Chamber of Commerce's Incoterms and Uniform Customs and Practices for Documentary Credits points to the growth of:

A) International treaty law
B) Customary international business law
C) International commercial jurisprudence
D) Convention driven international business law

Question 33

The effort to unify international sales law was significantly enhanced by the ratification of:

A) The ICC's Incoterms
B) The ICC's Uniform Customs and Practices for Documentary Credits
C) The U.N. Convention on Contracts for the International Sale of Goods
D) The U.N. Convention on International Sales Contracts

Question 34

U.S. Courts use which of the following to extend contractual liability to protect someone who reasonably relied upon the belief that the parties would conclude a final agreement:

A) Guaranty theory
B) Assurance theory
C) Bad Person theory
D) Promissory theory

Question 35

R.G. Group, Inc. v. Bojangles' of America, Inc. illustrates the concept in American law that:

A) Recovery of damages under primary estoppel is not a remedy available in U.S. courts
B) Informal or unwritten agreements are not binding
C) The statute of frauds requires a contract to be in writing
D) Contractual liability only becomes vested when the parties move beyond mere negotiations

Question 36

In the civil law, pre-contractual liability premised on the implied duty of the parties to act in good faith during the negotiations of a contract is known as:

A) Culpa in contrahendo
B) Contra proferentem
C) Contract of honor
D) Promissory estoppel

Question 37

In A v B, the court held that a non-terminating party's claims for damages are:
I) Limited to provable and certain, not speculative damages
II) Limited by its duty to minimize damages

A) I only
B) II only
C) Both I & II
D) Neither I nor II

Question 38

Under Dutch law, contract negotiations are divided into three stages. If a party breaks off negotiations during the second or continuing stage, the breaking off party may:

A) Be liable for full contract damages including expenses and loss of expected profits of the other party
B) Incur no legal liability
C) Be liable for out of pocket expenses of the other party
D) None of the above

Question 39

Under German law, if a party to a negotiation terminates the negotiation after indicating to the other party that the negotiations will lead to a contract, then:

A) The terminating party is liable for damages
B) The terminating party is not liable for damages
C) The terminating party is not liable for damages if it can provide a commercially reasonable explanation for the termination
D) None of the above

Question 40

All of the following are sources of the lex mercatoria except:

A) Arbitral decisions
B) Standard form contracts
C) Rules of international organizations
D) Uniform laws
E) All of the above are sources of the lex mercatoria

Question 41

The concept that says unfair or unconscionable contracts or clauses should not be enforced is known as:

A) Pacta sunt servanda
B) Prima facie
C) Culpa in contrahendo
D) Abus de droit

Question 42

The Chinese Foreign Economics Contracts Law sets the statute of limitations for bringing a lawsuit at:

A) Four years
B) Five years
C) Six years
D) Seven years

Question 43

Article 1.101 of the Principles of European Contract Law states that the Principles will apply in contract disputes when:

A) The parties select them as their choice of law
B) The contract is to be governed by general principles of law or the lex mercatoria
C) The parties to a dispute are both from European countries
D) A & B only
E) All of the above

Question 44

In the area of acceptance under the Principles of European Contract Law:
I) A contract is concluded when the acceptance reaches the offeror.
II) An offeror may revoke an offer after dispatch of an acceptance but before receipt.

A) I only
B) II only
C) Both I & II
D) Neither I nor II

Question 45

The principle of Nachfrist Notice, whereby a non-performing party may obtain an extension of the time of performance by giving notice to the other party, is accepted under:

A) Uniform Commercial Code (UCC)
B) Most Civil law systems
C) Convention on the International Sale of Goods (CISG)
D) B & C only
E) None of the above

Question 46

Under the European Principles, a written statement that would prove evidence of a contract includes all of the following except:

A) Telegram
B) Fax
C) E-mail
D) A & B only
E) All of the above

Question 47

The European Principles provide a party the right to avoid a contract due to:

A) Mutual mistake
B) Unfair advantage
C) Unfair terms
D) B & C only
E) All of the above

Question 48

The UNIDROIT Principles of International Commercial Contracts are:

A) Up for adoption as domestic law for international contracts
B) Only applicable to the commercial sale of goods
C) Only deal with the mechanics of offer and acceptance
D) B & C only
E) None of the above

Question 49

The Russian Civil Code is characterized by all of the following except:

A) A sharing of many of the principles and concepts of American contract law
B) A strong emphasis on formalities including the written from and notarial certifications
C) The lack of an excuse doctrine for non-performance
D) The recognition of preliminary contracts

Question 50

The Chinese Foreign Economic Contracts Law is characterized by all of the following except:

A) A general adoption of the American concept of liquidated damages
B) The adoption of the common law's principle of mitigation
C) A recognition of force majeure as an excuse for non-performance
D) An acceptance of oral contracts

Question 51

Briefly describe some examples of the trend in the development of a unified body of international business law.

Question 52

Compare and contrast the U.S. and German approach to pre-contractual liability.

Question 53

Under Dutch law, contract negotiations are divided into three stages. Discuss each stage and explain how the legal liability of the breaching party changes in each stage.

Question 54

Describe five sources of the lex mercatoria and provide examples.

Question 55

Compare and contrast the notions of offer and acceptance in American contract law and the European Principles.