Question 1

Because of political changes in the late twentieth century,which of the following countries has had to build from scratch an entire commercial legal system?

Accepted Answer

Russia had to build an entire commercial legal system from scratch following political changes in the late twentieth century, specifically the collapse of the Soviet Union.

Question 2

Which of the following is usually placed in the arbitration clause that is becoming standard in many international contracts?

Accepted Answer

The place of arbitration is usually included in the arbitration clause as it determines the legal jurisdiction and the procedural rules that will apply to the arbitration. The other options listed are not typically included in the arbitration clause.

Question 3

In settling international commercial transaction disputes,which of the following methods accounts for the majority of settlements?

Accepted Answer

Informal settlement is the most common method for resolving international commercial disputes as it is often quicker, less expensive, and allows parties to maintain business relationships.

Question 4

When all else fails in an international commercial dispute,the final step is:

Accepted Answer

When all other methods fail, the final step is to resort to litigation, which involves taking the matter to court or an alternative dispute resolution mechanism such as arbitration. Litigation provides a legal and binding solution to the dispute, and is often the most effective way to resolve complex international commercial disputes.

Question 5

One counterfeiting problem for international marketers is:

Accepted Answer

Collusion between contract manufacturers and illegitimate sellers is one of the major counterfeiting problems faced by international marketers. This is because the contract manufacturers have access to the original designs and specifications of the product, and they can easily reproduce and sell counterfeit products to the illegitimate sellers without the knowledge of the brand owner. As a result, international marketers need to carefully choose their contract manufacturers and monitor their manufacturing processes to prevent counterfeiting.

Question 6

Ralph Richards has been attempting to solve a problem that his company has with a contract default by the Dutch government.He has tried conciliation but the two parties could never find any common ground on which to begin a fruitful negotiation for settlement.Which of the following will most likely be the course of action that both of the two parties will try next?

Accepted Answer

Since conciliation did not work, the next step would be to try a more formal method of dispute resolution. Mediation and informal settlement are also options, but arbitration is a more structured and binding process. Litigation and coercion are usually considered last resorts and are generally more time-consuming and expensive than arbitration.

Question 7

Arbitration clauses require agreement on two counts.Which of the following is one of those accounts?

Accepted Answer

The two required agreements for arbitration clauses are that the parties agree to participate in arbitration instead of going to court, and that they agree to abide by the resulting arbitration award. Option A is not required as the purpose of arbitration is to have a neutral third party decide who is right and wrong. Option B is related to the legal process but does not refer specifically to arbitration. Option D is not required as parties are allowed to hire legal counsel in arbitration. Option E is not a standard agreement for arbitration clauses as it is not a practical or feasible solution for most disputes.

Question 8

Which of the following supranational system of laws governs world commerce today?

Accepted Answer

There is no single supranational system of laws that governs world commerce; international trade is regulated by a complex mix of treaties, agreements, and national laws.

Question 9

One authority suggests that settlement of every dispute should follow four steps.Which of the following is considered to be the first step in this process?

Accepted Answer

The first step in the process of settling a dispute is to try to placate the injured party. This involves acknowledging their grievances and making an effort to understand their perspective. It may involve offering an apology or some form of compensation, and demonstrating a willingness to work towards a mutually acceptable resolution. Only if this step fails to resolve the dispute should other options, such as conciliation, arbitration, or litigation, be considered. Coercion is not a recommended step in the dispute resolution process.

Question 10

The first step that most arbitrators try to resolve a dispute between two parties is to attempt:

Accepted Answer

Arbitrators typically start with conciliation, which involves facilitating communication between parties to reach a mutual agreement before moving to more formal processes.

Question 11

The World Court can adjudicate disputes between which of the following?

Accepted Answer

The World Court, also known as the International Court of Justice, adjudicates disputes between governments. It does not have jurisdiction to resolve disputes between a company and a government, two companies, or a private citizen and a government.

Question 12

In the usual ______________ procedure,parties select a disinterested and informed party or parties to sever as a referee to determine the merits of the case and make a judgment that both parties agree to honor.

Accepted Answer

The procedure described in the question is that of arbitration, which involves the parties choosing a third party to make a binding decision on their dispute. A is incorrect because conciliation involves a third party facilitating discussions between the parties, but not making a binding decision. B is incorrect because informal settlements can take many forms and do not necessarily involve a third party. D is incorrect because litigation involves going to court and having a judge make a decision, rather than the parties choosing a third party to make the decision. E is incorrect because coercion involves one party forcing the other to accept a certain outcome, rather than mutually agreeing to honor a decision.

Question 13

Most arbitration is successful,but success depends on the:

Accepted Answer

The willingness of both parties to accept the arbitrator's rulings is crucial for a successful arbitration process. If one party is not willing to accept the ruling, it can result in further legal battles and possibly negate the purpose of the arbitration. The other factors may have some influence but are not as significant as the parties' willingness to accept the arbitration outcome.

Question 14

All of the following are considered to be deterrents to litigation EXCEPT:

Accepted Answer

The other choices all highlight factors that may discourage parties from pursuing litigation, whereas choice D suggests that litigation may be perceived as relatively easy and cost-effective.

Question 15

In international commercial disputes,jurisdiction is generally determined in any of the following ways EXCEPT:

Accepted Answer

The amount of money involved in a contract is not a determining factor in jurisdiction. The other options listed are all factors that can be considered when determining jurisdiction in international commercial disputes.

Question 16

Under _____________,the legal system is subordinate to prevailing economic conditions.

Accepted Answer

Marxist-socialist tenets prioritize economic conditions and the means of production over legal systems, making the legal system subordinate to prevailing economic conditions.

Question 17

The basis of ___________ is the Koran.

Accepted Answer

Islamic law, also known as Sharia, is based on the teachings of the Koran and other Islamic scriptures. Common law is based on judicial precedents and legal traditions, while code law is based on written laws and statutes. Marxist-socialist tenets refer to political ideologies and are not a basis for a specific type of legal system. Legal tradition covers a variety of different legal systems, so it is too broad to be the correct answer in this case.

Question 18

Among the unique aspects of Islamic law is the prohibition against the payment of:

Accepted Answer

Islamic law prohibits the payment and receipt of interest, also known as riba. This prohibition is based on the belief that money should be earned through legitimate business transactions and not through exploiting the needs of others. Therefore, Islamic finance operates according to principles such as profit and loss sharing, risk sharing, and asset-based financing.

Question 19

Another name for conciliation as a means for settling a dispute in international commerce is:

Accepted Answer

Conciliation and mediation are often used interchangeably in the context of settling disputes in international commerce. Both involve a neutral third party helping the parties in dispute reach a mutually acceptable resolution. However, conciliation typically refers to a specific type of mediation where the conciliator provides non-binding recommendations for resolving the dispute. Therefore, the best choice for another name for conciliation is mediation.

Question 20

A nonbonding agreement between parties to resolve disputes by asking a third party to mediate differences is called:

Accepted Answer

Conciliation is a nonbinding process where a third party helps the disputing parties to reach a mutually agreeable solution.

Quiz 7: The International Legal Environment: Playing by the Rules