Question 1

Business Universal Corporation, a U.S. firm, establishes a wholly owned subsidiary firm in Brazil. In this situation, Business Universal retains complete control and authority over

Accepted Answer

By establishing a wholly owned subsidiary, Business Universal Corporation retains complete control and authority over all of the operation in Brazil because the subsidiary is wholly owned, meaning that Business Universal owns 100% of the subsidiary's shares and has full ownership and control over its operations.

Question 2

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

The clause specifying English as the official language of the contract is a choice-of-language clause. It determines the language that will be used to interpret the terms of the contract.

Question 3

Financial Invest Corporation, a U.S. firm, files a suit against Ghana in a U.S. court. Ghana claims foreign sovereign immunity. Under the Foreign Sovereign Immunities Act

Accepted Answer

Under the Foreign Sovereign Immunities Act, the burden is on the plaintiff to prove that the foreign state is not entitled to immunity, typically by showing that an exception to immunity applies.

Question 4

Global Enterprise Corporation, a U.S. firm, wishes to participate, but limit its involvement, in Middle Eastern markets. Global Enterprise empowers Alem, Ltd., a United Arab Emirates firm, to enter into contracts in certain countries on Global Enterprise's behalf. This is

Accepted Answer

This is an agency relationship, where Global Enterprise is granting Alem the authority to act on their behalf in certain countries.

Question 5

Brew Heaven Inc., a U.S. corporation, makes a deal with Celtic Pubs, Ltd., an Irish firm, that allows Celtic to use Brew's trade name in Ireland in return for a fee. This is

Accepted Answer

The agreement between Brew Heaven and Celtic Pubs is a franchise, in which the Irish firm pays a fee to use the trade name of the U.S. corporation in another country.

Question 6

​The government of Korea sets a limit on the amount of rice that can be imported from the United States. This is

Accepted Answer

The government of Korea setting a limit on the amount of rice that can be imported from the United States is a quota. A quota is a limit set by a government on the quantity of a good that can be imported during a specified period of time.

Question 7

Finance International Inc., a U.S. firm, and Euro Invest, Ltd., a firm based 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 can specify any location agreed upon by the parties, not limited to the geographic boundaries of the United States or Great Britain.

Question 8

Northwest Resources, Inc., and Midwest Commodities Corporation are exporting firms that join together to export a line of products. Northwest Resources and Midwest Commodities apply to Commerce Bank for a loan to fund their effort. Under federal law, Commerce and other U.S. banks are

Accepted Answer

Under federal law, banks are encouraged by credit guaranties to lend funds to support exports. Therefore, Northwest Resources and Midwest Commodities may receive financing from Commerce Bank.

Question 9

Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd., a Canadian firm, to give Pharma the right to sell Optima's products in Canada. This is

Accepted Answer

This is a distribution agreement as Optima Medico Corporation is giving Pharma Beneficial, Ltd. the right to sell its products in Canada.

Question 10

Hong Ltd., a Chinese firm, imports its goods into the United States and offers those goods for sale at "less than fair value." This is​

Accepted Answer

"Less than fair value" imports are classified as dumping which refers to the practice of exporting goods to another country at a price lower than their normal value. This can harm domestic producers in the importing country and distort trade patterns.

Question 11

Significant business develops in Spain for Graphic Comix, Inc., a U.S. firm. Graphic Comix appoints Comicas Graphico, Ltd., a Spanish firm, to act as Graphic Comix's marketing representative in Spain. This is

Accepted Answer

This is indirect exporting because Graphic Comix is not directly exporting to Spain but is using a Spanish representative company to market their products in Spain.

Question 12

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

Accepted Answer

This is a direct exporting agreement because Alpha WiFi Corporation is selling their goods directly to Bueno Computadores, Ltd. in Argentina without the use of intermediaries.

Question 13

Tropic Foods Corporation, a U.S. firm, owns property in Ecuador. When the Ecuadoran government seizes the property, Tropic Foods asks a U.S. court to order the property's return. The court rules that Ecuador is exempt from the court's jurisdiction. This is

Accepted Answer

This scenario reflects the doctrine of sovereign immunity, which grants foreign governments immunity from lawsuits in U.S. courts. As a result, Ecuador is exempt from the U.S. court's jurisdiction, and Tropic Foods cannot seek relief through the U.S. legal system.

Question 14

Renew Energy Company, a U.S. firm, and Seawater 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 other options are specific organizations, but the clause does not have to specify one of them.

Question 15

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 16

Without permission, a Russian firm names itself McDonald's and begins selling hamburgers and French fries in Russia. This is

Accepted Answer

This is piracy, which is the unauthorized use of another company's intellectual property for commercial gain. In this case, the Russian firm is using the McDonald's name and selling their products without permission.

Question 17

The United States taxes each barrel of imported oil at a flat rate. This is

Accepted Answer

The United States taxes each barrel of imported oil at a flat rate, which is a type of tariff.

Question 18

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

Accepted Answer

This is a licensing agreement because Munchies Bistro Corporation is giving Manger au Brasserie, S.A. the right to use its trademark.

Question 19

World Media, Inc., a U.S. firm, expands into international markets through a joint venture. In the venture, World Media shares responsibilities

Accepted Answer

In a joint venture, both parties typically share in the profits and liabilities as they collaborate on a business endeavor.

Question 20

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 most likely reason why World Oil, Inc. may not be able to recover its assets from Venezuela in a U.S. court is the act of state doctrine. This legal principle holds that U.S. courts should not interfere with the official acts of foreign governments taken within their own territories. Since Venezuela has seized the assets of World Oil, Inc., this can be seen as an official act of the government, and the act of state doctrine may prevent a U.S. court from overturning or nullifying this action. The World Trade Organization and the Central American Free Trade Agreement are unlikely to be relevant in this case, as they generally deal with international trade and investment disputes between countries rather than claims by foreign companies against a particular government. The principle of comity, which is the recognition by one country of another country's laws and decisions, may be relevant in some cases, but it is unlikely to have much effect if the act of state doctrine applies.

Quiz 24: International and Space Law