Question 1

The best means of establishing the proper law for an international contract is

Accepted Answer

The best means of establishing the proper law for an international contract is for the parties themselves to make express provision. This ensures that both parties are fully aware and in agreement of which law will govern the contract, which will help avoid any potential disputes and confusion in the future.

Question 2

A,based in Canada,has a contract with B,in Denmark,for the sale by A to B of certain goods.The contract specifies that A bears responsibility for shipping the goods and for insuring them.In this case,A and B have entered into

Accepted Answer

A CIF (Cost, Insurance, and Freight) contract specifies that the seller (A) is responsible for arranging and paying for the shipping and insurance of the goods to the buyer's (B) destination. This matches the scenario described.

Question 3

A large multinational Canadian manufacturing company has just bought a majority of shares in a similar company located in Spain.This is an example of

Accepted Answer

The purchase of a majority of shares in a company located in another country is a form of direct foreign investment, as it involves significant ownership and control over the foreign company.

Question 4

A large Korean car manufacturer has just built a new model car which it is going to sell in Canada.In Korea the car will be sold for the Canadian equivalent of $25 000.00 but to get into the market in Canada the car will be sold for $15 900.00 Canadian.In this case,the company has engaged in

Accepted Answer

The company has engaged in dumping, which involves selling a product in a foreign market at a lower price than it is sold domestically in order to gain market share. This is often considered unfair competition and can harm local businesses.

Question 5

A,based in Canada,agrees to sell goods to B in Australia.The contract provides that B will manage shipment of the goods and A will deliver the goods to and load them on a carrier designated by B.In this case,A and B have entered into

Accepted Answer

The contract between A and B is an FOB (Free on Board) contract. In an FOB contract, the seller (A) is responsible for delivering the goods to a port or other designated location and loading them onto the carrier designated by the buyer (B). The buyer is then responsible for all costs and risks associated with the shipment from that point forward. This is consistent with the terms of the contract in this scenario.

Question 6

Use this fact situation to answer the related questions that follow. A company in Canada has just entered into a contract for the sale of goods to a company in France;however,the contract is silent as to the law that will apply.
In this case,in the event of a dispute,a Canadian court will look at

Accepted Answer

When a contract is silent as to the law that will apply, Canadian courts will look to the intention of the parties to determine which law applies.

Question 7

Public international law is

Accepted Answer

Public international law is a body of law that governs the relationships between sovereign states and international organizations. It is concerned with the rights and duties of states in their conduct with each other, including the areas of trade, diplomacy, human rights, and war. It does not directly involve the relations between public officials, public entities, or private citizens of different countries, although these relations may be affected by international law.

Question 8

A buyer in British Columbia purchases equipment from a manufacturer in China.The contract between the parties stipulates that any dispute between the parties arising out of the transaction will be decided by an arbitrator in Switzerland.The buyer is not satisfied with the quality of the equipment and brings the dispute before an arbitrator in Switzerland.What law will the arbitrator apply to resolve the dispute?

Accepted Answer

The parties have agreed in the contract that any dispute will be decided by an arbitrator in Switzerland and have therefore agreed to apply a particular law. The law that the parties agree should apply is the best choice in this case.

Question 9

Foreign investment occurs when

Accepted Answer

Foreign investment refers specifically to a business establishing a branch or subsidiary in a foreign country, rather than simply entering into trade relations or investing money in a foreign business or country.

Question 10

Use this fact situation to answer the related questions that follow. A,based in Ontario,enters into a contract with B,in Geneva,Switzerland,whereby B will manufacture and supply to A a certain quantity of watches.The negotiations first took place by faxes between Ontario and Geneva and were then held in person in Geneva.Most of the people connected with the negotiations and the contract live in Geneva and B's manufacturing plant is there.B manufactures the watches and then delivers them to A in Ontario.However,A refuses to accept them because they do not meet the specifications agreed on.There is a marked absence of the actual specifications in the contract,and it also does not contain a jurisdiction clause in the event of a dispute.Having rejected the delivered goods,A now goes out and buys the watches from a German manufacturer at twice the cost of the Swiss watches.
In this case,under Ontario law,A can institute an action in Ontario against B because

Accepted Answer

A can institute an action in Ontario because A suffered damages in Ontario.

Question 11

Use the fact situation in Q12 to answer the related question that follows. The principle of law that allows a party to request a change of court of trial when it results in undue hardship is

Accepted Answer

The principle of forum non conveniens allows a party to request a change of court of trial when it would result in undue hardship, such as in the case of the plaintiff in Q12 who lives in a different state than the court where the lawsuit was filed. The other options listed are not related to the concept of changing the court of trial.

Question 12

Unlike domestic contracts,international contracts are more likely to involve special problems,such as

Accepted Answer

International contracts often involve the complexities of transportation, insurance, and financing due to the distance between the parties involved and the potential for different legal systems to come into play. These factors may not be as prevalent in domestic contracts. While options B and C may also be applicable in some cases, they are not as universal as the issues described in option A. Option D is not necessarily a special problem unique to international contracts, and option E is more specific to certain industries or types of transactions.

Question 13

An export sale normally requires at least

Accepted Answer

An export sale typically involves several key documents to ensure the transaction is properly recorded, legal, and that the goods are shipped and insured correctly. These documents include the insurance policy or certificate to protect against loss or damage during transport, the contract of sale which outlines the terms and conditions of the sale, the bill of lading which serves as a receipt for the shipped goods and a document of title, and the invoice which details the products sold and the amount due. Therefore, all of the options listed are required for an export sale.

Question 14

A,based in Canada,enters into a contract for the sale of goods to B in Germany.The contract provides that A is to make the goods available to B at A's own warehouse.In this case,the arrangement between A and B is

Accepted Answer

The arrangement between A and B is an EXW (Ex Works) contract as it specifies that A is to make the goods available at their own warehouse, and the buyer (B) is responsible for all costs and risks associated with the transport of the goods from A's warehouse to their final destination. DDP (Delivered Duty Paid), FOB (Free on Board), and CIF (Cost, Insurance, and Freight) contracts all involve the seller being responsible for some or all of the costs and risks associated with the transportation of the goods, which is not the case in this scenario.

Question 15

Use the fact situation in Q12 to answer the related question that follows. If A institutes an action in Ontario against B,what argument(s)will B most likely raise to transfer the action to Geneva to be heard by a Swiss court?

Accepted Answer

B would likely argue all of the above points to demonstrate that Geneva is the more appropriate forum for the case, considering the location of parties, negotiations, and relevant facilities.

Question 16

International business transactions require,by definition,parties in

Accepted Answer

International business transactions involve parties from two or more different countries, which distinguishes it from domestic transactions. Bilateral treaties, trade agreements, questions of public international law, and specific treaties like NAFTA or GATT may be relevant to such transactions, but they are not necessary for the definition of international business transactions. Additionally, international business transactions involve both private law (governing contracts, property, and torts) and public law (governing international trade, investment, and dispute resolution).

Question 17

Use the fact situation in Q4 to answer the related question that follows. When the Canadian court cannot determine which law will apply from the intention of the parties,among other things,the court will consider

Accepted Answer

When the court cannot determine which law will apply from the intention of the parties, among other things, the court will consider all the options provided, which include: the place of business of the parties, the place of acceptance of the risk, where the contract was to be performed, and where the contract was made. Therefore, the best choice is E, which includes all of the above.

Question 18

When we speak of foreign presence,we mean that

Accepted Answer

Foreign presence refers to the establishment of an agent or representative office in a foreign country, indicating that a business has a physical presence in that foreign market. Options A, B, C, and D may involve foreign investment or trade relations, but not necessarily a physical presence in a foreign country.

Question 19

Use the fact situation in Q4 to answer the related question that follows. In the event that the Canadian court cannot determine which law will apply from the intention of the parties,it will

Accepted Answer

In cases where the intention of the parties cannot be determined, Canadian courts will typically look to the law of the country most closely connected to the contract. This is known as the "closest and most real connection" test. Therefore, the court would impose the law of the country most connected to the contract, which in this case would likely be France.

Question 20

In commercial arbitration,

Accepted Answer

All of the above statements are true for commercial arbitration. The arbitrator is usually experienced, the parties voluntarily agree to use this process, and the decision reached by the arbitrator is binding on the parties. Additionally, the decision can be enforced by a court of law.

Quiz 30: International Business Transactions