Question 1

Finance Corporation, a U.S. firm, files a suit against Ghana in a U.S. court. Under the Foreign Sovereign Immunities Act, Ghana is immune from the jurisdiction of the court if Ghana has

Accepted Answer

Under the Foreign Sovereign Immunities Act, a foreign state is generally immune from the jurisdiction of U.S. courts unless specific exceptions apply. Engaging in commercial activity or committing a tort in the U.S. are exceptions to this immunity. However, making a political decision is not an exception, so Ghana would remain immune in this case.

Question 2

Energy Company, a U.S. firm, and Fresh Petro, a Dutch firm, enter into a contract that includes an arbitration clause. This clause must provide that the arbitrator will be

Accepted Answer

The arbitration clause can specify any third party as the arbitrator, as long as both parties agree to it. The clause does not have to specify a particular organization like the American Arbitration Association, the Dutch Arbitration Organization, or the International Chamber of Commerce.

Question 3

Global Fashion, Inc., a U.S. firm, and Haute Couture, a Haitian firm, are parties to a contract that specifies the official language of the contract is English. This is

Accepted Answer

A choice-of-language clause specifies the language in which the contract will be interpreted and enforced.

Question 4

Opti Meds Inc., a U.S. firm, signs a contract with Pharma Ltd., a Canadian firm, to give Pharma the right to sell Opti's products in Canada. This is

Accepted Answer

A distribution agreement is a contract where one party (Opti Meds Inc.) grants another party (Pharma Ltd.) the right to sell its products in a specific territory (Canada).

Question 5

Royal Hotel Corporation, a U.S. firm, establishes a wholly owned subsidiary in Singapore. As a parent corporation, with respect to the subsidiary, Royal retains complete ownership of

Accepted Answer

A wholly owned subsidiary means that the parent corporation, Royal Hotel Corporation, retains complete ownership of all of the subsidiary.

Question 6

Sufficient business develops in France for Graphic Comics Inc., a U.S. firm, to appoint Comics Graphique Ltd., a French firm, to act as Graphic's marketing representative in France. This is

Accepted Answer

Indirect exporting occurs when a firm hires an intermediary, such as a distributor or representative in a foreign market, to handle the exporting process. In this case, Graphic Comics Inc. is appointing Comics Graphique Ltd. to act as their marketing representative in France, making it an example of indirect exporting.

Question 7

Market Maker, Inc., a U.S. firm, can license a foreign manufacturing company to use its

Accepted Answer

The answer of Market Maker, Inc., a U.S. firm, can...

Question 8

Lunchies Corporation, a U.S. firm, signs a contract with Manger au Brasserie, S.A., a French firm, to give Manger the right to use the Lunchies trademark in restaurants in France. This is

Accepted Answer

This is a licensing agreement as Lunchies Corporation is giving Manger au Brasserie, S.A. the right to use their trademark in exchange for royalties.

Question 9

In an international contract, under a force majeure clause, a party may be excused from liability for nonperformance by

Accepted Answer

A force majeure clause typically covers unforeseen events like natural disasters, war, or government actions such as an embargo, which prevent a party from fulfilling contractual obligations.

Question 10

Global Project, a U.S. firm, owns property in Hong Kong. The government of China seizes the property. The firm claims that this is confiscation. The government claims that it is expropriation. The difference concerns

Accepted Answer

Confiscation and expropriation refer to the same action of the government taking over private property for public use without the owner's consent. However, the term expropriation implies that the government will provide compensation to the owner for the seized property. Confiscation, on the other hand, implies that the government is taking the property without any intention of compensation. Therefore, the difference between the two terms is the purpose of the seizure and the payment of compensation.

Question 11

Mont Blanc 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 Mont Blanc's goods in

Accepted Answer

The answer of Mont Blanc S.A., a French firm, imports...

Question 12

Burger Heaven, a U.S. firm, makes a deal with a Canadian firm, Donny's Diners, that allows Donny's to use Burger Heaven's intellectual property in Canada in return for a fee and a promise to follow Burger Heaven's guidelines and standards. This is

Accepted Answer

This arrangement is a franchise, where Donny's Diners is allowed to use Burger Heaven's intellectual property and must adhere to its guidelines and standards in exchange for a fee.

Question 13

Trade barriers are

Accepted Answer

Trade barriers are restrictions put in place by a government or other entity to limit imports into the country. These can include tariffs, quotas, and regulations that make it more difficult or expensive to import goods. Trade barriers are often used to protect domestic industries from foreign competition or to address concerns about unfair trade practices. They can also be used as a bargaining tool in international trade negotiations.

Question 14

Overland Rail Corporation, a U.S. firm, owns property in India. The government of India seizes the property for a proper public purpose and pays the firm just compensation. This is

Accepted Answer

Expropriation occurs when a government seizes private property for a public purpose but provides just compensation to the owner, which is the case here.

Question 15

Consolidated Corporation, a U.S. firm, wishes to participate, but limit its involvement, in Middle Eastern markets. Consolidated contracts with Doha Ltd., an Egyptian firm, to enter into contracts in certain countries on behalf of Consolidated. This is

Accepted Answer

An agency relationship involves one party (the agent) acting on behalf of another (the principal). In this case, Doha Ltd. acts on behalf of Consolidated Corporation to enter into contracts in Middle Eastern markets.

Question 16

Equity International Inc., a U.S. firm, and Finance Invest Ltd., a firm in Great Britain, are parties to a contract with a choice-of-forum clause. The forum specified in the clause must be within the geographic boundaries of

Accepted Answer

The choice-of-forum clause in a contract can specify any location agreed upon by the parties, not limited to the geographic boundaries of the countries where the parties are based.

Question 17

Venezuela seizes the assets of World Oil, Inc., a U.S. firm. World Oil's recovery from Venezuela in a U.S. court may be prevented by

Accepted Answer

The act of state doctrine prevents U.S. courts from examining the validity of public acts committed by a recognized foreign sovereign within its own territory, which could prevent World Oil from recovering its assets in a U.S. court.

Question 18

Airbud Corporation, a U.S. firm, signs a contract with Bueno Computadores Ltd., an Argentinean firm, for a shipment and payment for Airbud's goods. This is

Accepted Answer

This is a case of direct exporting, since Airbud Corporation is directly exporting its goods to the Argentinean firm, Bueno Computadores Ltd.

Question 19

Mountain Coffee Company, a U.S. firm, owns property in Nicaragua. When the government of Nicaragua seizes the property, Mountain asks a U.S. court to order the property's return. The court rules that Nicaragua is exempt from the court's jurisdiction. This is

Accepted Answer

The doctrine of sovereign immunity protects foreign nations from being sued in U.S. courts, which is why the court ruled that Nicaragua is exempt from its jurisdiction.

Question 20

In international business, franchising involves

Accepted Answer

Franchising involves granting a license to another party to use your brand, business model, and systems in exchange for fees and royalties.

Quiz 43: International and Space Law