Dynamic Business Law 4th Edition Kubasek Test Bank

Dynamic Business Law 4th Edition
Kubasek Test Bank

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Chapter 06 International and Comparative Law
MULTIPLE CHOICE QUESTIONS

1) The terms international law and comparative law do not mean the same thing.
A) True
B) False
2) A foreign sales representative does the same thing as a distributor when conducting business
internationally.
A) True
B) False
3) A franchise agreement and a joint venture are the same thing.

A) True
B) False
4) Because ethical issues vary from country to country, international business persons should not
take ethical considerations into account in the decision-making process.
A) True
B) False
5) The General Agreement on Tariffs and Trade became effective in 2000.

A) True
B) False
6) According to the General Agreement on Tariffs and Trade, a subsidy is a government financial
contribution that allots a benefit to a specific industry or enterprise.
A) True
B) False
7) When three or more states agree to reduce and gradually eliminate tariffs and other trade barriers,
it is called a multilateral free trade agreement.
A) True
B) False
8) The United States is not a party to the Central American Free Trade Agreement.
A) True
B) False
9) The European Union is an example of a customs union.

A) True
B) False
Copyright © McGraw-Hill Education.All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
10) The United States has no bilateral trade agreements.
A) True
B) False
11) An interactive website, which allows users to exchange information but not complete contracts,
is sufficient to create general personal jurisdiction in any state in the U.S.
A) True
B) False
12) There are three basic types of regional trade agreements: multilateral free trade agreements,
customs unions, and bilateral free trade agreements.
A) True
B) False
13) For a U.S. court judgment to be enforceable, the court must have either personal jurisdiction or
subject-matter jurisdiction.
A) True
B) False
14) The parties to an international contract cannot select the forum in which disputes are to be
resolved because the forum is always based on the location of the defendant's principle place of
business.
A) True
B) False
15) Agents of a foreign state are immune from civil actions against them, but not from situations in
which the foreign agent engages in a commercial activity.
A) True
B) False
16) Which of the following best describes the term "comparative law?"
A) It is the study of the difference between public and private law in the United States.
B) It is the study of international organizations and their structure.
C) It is the study of the legal systems of different states.
D) It is the study of the laws governing the conduct of states and international organizations
and their relationships with one another.
E) It is the study of the difference between constitutions and administrative rules and
regulations within the United States.
17) refers to laws governing the conduct of states and international organizations and their
relationships with one another.
A) Affiliate law
B) Comparative law
C) Foreign subsidiary law
D) International law
E) Joint law
18) Which of the following is true regarding international organizations?

A) The International Monetary Fund is an international organization, but neither the United
Nations nor the International Bank for Reconstruction and Development (World Bank) are
international organizations.
B) The United Nations and the International Monetary Fund are international organizations,
but the International Bank for Reconstruction and Development (World Bank) is not.
C) The United Nations, the International Monetary Fund, and the International Bank for
Reconstruction and Development (World Bank) are all international organizations.
D) The International Bank for Reconstruction and Development (World Bank) and the
International Money Fund are international organizations, but the United Nations is not an
international organization.
E) The United Nations is an international organization, but the International Monetary Fund is
not.
19) Which of the following has the U.S. Supreme Court held with respect to whether U.S. courts
must rely on customary international law?
A) The U.S. Supreme Court has held that U.S. courts may disregard customary international
law.
B) The U.S. Supreme Court has held that regardless of the existence of any legislative act to
the contrary, U.S. courts must rely on customary international law.
C) The U.S. Supreme Court has held that even if a governing international agreement says
otherwise, a U.S. court must rely on customary international law.
D) The U.S. Supreme Court has held that in the absence of a governing international
agreement or controlling executive or legislative act or judicial decision, U.S. courts must
rely on customary international law.
E) The U.S. Supreme Court has held that even if a controlling executive act is to the contrary,
U.S. courts must rely on customary international law.
20) Which of the following is an international agreement?
A) An agreement that is made between at least three states regarding an international subject
matter.
B) An agreement that is only between two states, not three or more, relating to an international
subject matter.
C) A general and consistent practice by states regardless of whether the practice is accepted as
law.
D) A written agreement made between states governed by international law and relating to
international subject matter.
E) A general and consistent practice by states that is accepted as law.
21) A company that sends its products to a foreign marketplace for sale has engaged in .
A) Foreign distributing
B) Exportation
C) Foreign transaction
D) Importation
E) Subsidization
22) Which of the following refers to an agent who distributes, represents, or sells goods on behalf of
a foreign seller?
A) Export representative
B) Foreign exportation proponent
C) International sales and importation expert
D) Import representative
E) Foreign sales representative
23) A[n] purchases goods from a seller for resale in a foreign market and
actually takes title to the goods assuming the risk of being unable to resell them.
A) Licensing agent
B) Affiliate agent
C) Distributor
D) Foreign sales representative
E) Joint agent
24) Ratification of international agreements occurs in the U.S. by which of the following means?
A) Through consent of the president.
B) Through the advice and consent of two-thirds of the House of Representatives after the
president submits the agreement for consideration.
C) Through the consent of the president and the approval of at least half the individual state
legislatures.
D) Through the advice and consent of two-thirds of the Senate and two-thirds of the House of
Representatives after the president submits the agreement for consideration.
E) Through the advice and consent of two-thirds of the Senate after the president submits the
agreement for consideration.
25) prohibits U.S. companies from offering or paying bribes to foreign government
officials, political parties, and candidates for office for the purpose of obtaining or retaining
business.
A) The International Fairness Objective Act
B) The Foreign Political Act
C) The Foreign Corrupt Practices Act
D) The International Trade Act
E) The Foreign Bribery Act
26) Which of the following is a tax levied on imported goods?

A) Indirect barrier
B) Embargo
C) Dumping
D) Non-tariff barrier
E) Tariff
27) Which of the following is true regarding nontariff barriers?

A) Embargoes are nontariff barriers, but quotas are not.
B) Quotas and embargoes are nontariff barriers, but indirect barriers are not.
C) Quotas, embargoes, and indirect barriers are all nontariff barriers.
D) Quotas are nontariff barriers, but embargoes are not.
E) Indirect barriers are nontariff barriers, but quotas and embargoes are not.
28) is a comprehensive multilateral trading system designed to achieve distortion-free

international trade through the minimization of tariffs and removal of artificial barriers?
A) The North and South American Free Trade Agreement
B) The General Agreement on Tariffs and Trade
C) The World Trade Organization Agreement
D) The International Agreement on Nontariffs and Trade
E) The European Free Trade Agreement
29) The facilitates international cooperation in opening markets and provides a

forum for future trade negotiations and the settlement of international trade disputes.
A) International Marketing Agreement
B) International Cooperation Agreement
C) National Trade Organization
D) World Trade Organization
E) Generally Favored Nation Organization
30) principle requires that World Trade Organization member states treat like goods
coming from other World Trade Organization member states on an equal basis.
A) The nondiscriminatory
B) The fairness
C) The normal trade relations
D) The quantitative restrictions
E) The like treatment
31) Which of the following is a practice wherein an exporter sells products in a foreign state for less
than the price charged for the same or comparable goods in the exporter's home market?
A) Disposal
B) Price cutting
C) Dumping
D) Profit maximizing
E) Subsidizing
32) Which of the following is one of the three basic types of subsidies?
A) Quantitative subsidy
B) Actionable subsidy
C) Indirect subsidy
D) International subsidy
E) Group subsidy
33) The allows recognized governments of WTO member states to bring an action
alleging a violation of GATT.
A) Mediation/arbitration agreement
B) Trade barrier agreement
C) GATT violation accord
D) Dispute Settlement Understanding
E) World dispute resolution agreement
34) What three countries are signatories to the North American Free Trade Agreement?
A) United States, Canada, and Japan
B) Canada, Mexico, and Great Britain
C) United States, Canada, and Mexico
D) England, France, and Italy
E) England, France, and Spain
35) A is a free trade area with the additional feature of a common external tariff
on products originating from outside the union.
A) Free trade union
B) External tariff union
C) Customs trade union
D) Customs union
E) International tariff union
36) Many are derived from Roman law.

A) Case law legal systems
B) Common law systems
C) Civil law systems
D) Islamic legal systems
E) Socialist legal systems
37) Which of the following is a characteristic of civil law?

A) Civil law systems use a form or system of separation of powers.
B) The civil law procedure is like the U.S. system of checks and balances.
C) Precedent is an important source of law in the civil law system.
D) In civil law systems the legislative branch has little authority.
E) The judicial branch in civil law systems may create its own new law.
38) Which of the following has the primary responsibility for the development of evidence within the
civil law system?
A) Witnesses
B) The judge
C) The court clerk
D) The attorneys
E) Officers of the court specifically charged with gathering evidence
39) Which of the following systems originated from the English legal system?
A) Statutory law
B) Civil law
C) Common law
D) Asian law
E) Inquisitorial law
40) Which type of legal system exists in North Korea?

A) Socialist legal system
B) Civil legal system
C) Asian legal system
D) Common law legal system
E) Islamic legal system
41) Which of the following translates directly to "law of merchants?"
A) Lex Loci
B) Ad Merchandiso
C) Lex Mercatoria
D) Res Judicata
E) Lex Seller
42) Which of the following is false regarding the Convention on Contracts for the International Sale
of Goods?
A) It applies to transactions involving the commercial sale of goods.
B) The United States has adopted the Convention on Contracts for the International Sale of
Goods.
C) National contract law applies in areas not covered by the Convention on Contracts for the
International Sale of Goods.
D) The Convention on Contracts for the International Sale of Goods has been ratified by the
majority of states in the developed world.
E) The Convention on Contracts for the International Sale of Goods was adopted in 2000.
43) The Convention on Contracts for the International Sale of Goods recognizes a concept by which
a buyer may give notice to the seller that delivery will be accepted beyond the time prescribed in
the contract. That concept is known as .
A) Nachfrist
B) Stare decisis
C) Benach
D) Offer of late performance
E) Tender of late performance
44) Under which of the following circumstances would the Uniform Commercial Code (UCC)
apply?
A) When both parties to a sales transaction engage in interstate commerce.
B) When the parties are residents of different countries, regardless of the amount of the sales
transaction.
C) When both parties to a sales transaction are residents of the United States
D) When the amount of the sales transaction exceeds $10,000.
E) When the parties are residents of different countries and the amount of the sales transaction
exceeds $10,000.
45) Which of the following is true about the CISG and the UCC?
A) Both the CISG and the UCC recognize express warranties and implied warranties of
merchantability arising from the sale of goods.
B) The CISG recognizes express warranties and implied warranties of merchantability arising
from the sale of goods, however the UCC does not.
C) The CISG recognizes express warranties and the UCC recognizes implied warranties of
D) The CISG and the UCC do not recognize express warranties and implied warranties of
E) The UCC recognizes express warranties and implied warranties of merchantability arising
from the sale of goods, however the CISG does not.
46) Do both the CISG and the UCC require contracts for the sale of goods be in writing?
A) No. The UCC requires that all contracts for the sale of goods be in writing, however, the
CISG does not require a writing.
B) No. The UCC requires that contracts for the sale of goods in excess of $500 be in writing,
however, the CISG does not require a writing.
C) No. The CISG requires that contracts for the sale of goods in excess of $500 be in writing,
however, the UCC does not require a writing.
D) No. The CISG requires that all contracts for the sale of goods be in writing, however, the
UCC does not require a writing.
E) Yes, both the UCC and the CISG require that contracts for the sale of goods be in writing.
47) The power of a court over persons appearing before it, is referred to as?
A) Subject matter jurisdiction
B) Superior jurisdiction
C) Personal jurisdiction
D) Litigation jurisdiction
E) Individual jurisdiction
48) permits adjudication of any claims against a defendant regardless of whether the claim
has anything to do with the forum.
A) Local personal jurisdiction
B) Domestic personal jurisdiction
C) Specific person jurisdiction
D) International personal jurisdiction
E) General personal jurisdiction
49) The multilateral convention which establishes procedures for transnational discovery between
private persons in different states is known as?
A) Hague Evidence Convention
B) NAFTA Evidence Convention
C) Smith Evidence Conventions
D) Discovery Convention
E) International Evidence Convention
50) Which of the following is an international agreement governing the arbitration of private
international disputes that has been ratified by the U.S.?
A) The International Arbitration Convention
B) The French Convention
C) The New York Convention
D) The NAFTA Convention
E) The Hague Convention
51) is a type of alternative dispute resolution procedure wherein disputes are submitted for
resolution to private, nonofficial persons selected in a manner provided by law or the agreement
of the parties.
A) Arbitration
B) International evaluation
C) Mediation
D) Multi-cultural evaluation
E) Neutral evaluation
52) Which doctrine is based on the notion that courts of one country will not sit in judgment on the
acts of another state government, done within its own territory?
A) Foreign Sovereign Immunities Act.
B) Comity doctrine.
C) Political question doctrine.
D) Forum non conveniens dontrine.
E) Act of state doctrine
53) In a sales contract between two companies, one in Florida and one in Kentucky, which of the
following is true about which set of laws would apply:
A) The CISG, because both parties to the sales transaction are residents of the United States.
B) The UCC, because both parties to the sales transaction are residents of the United States.
C) The UCC, but only if the parties opted out of the CISG.
D) Both the CISG or the UCC would apply
E) Neither the CISG nor the UCC would apply.
54) What doctrine allows courts to decline to exercise jurisdiction where there is a more convenient
forum to hear the case?
A) Convenience del forum
B) Abstention
C) Absolute privilege
D) Forum non conveniens
E) Jurisdictional convenience
10
[Miracle Face] Yoshe developed a great new type of face cream guaranteed to provide total sun protection,
remove wrinkles, and result in anyone looking at least ten years younger. Her product, Miracle Face, became
extremely popular in the U.S., where she has several shops, and also in other countries to which it was
shipped. Yoshe has a number of individuals in other countries seeking to team with her in selling Miracle Face.
Sam, a citizen of Mexico, asks that she grant him permission to use her name and any associated trademarks,
and allow him to sell Miracle Face in Mexico. Yoshe has an offer, however, from another Mexican citizen,
Nora. Nora proposes that she and Yoshe associate together, open a business to sell Miracle Face, and share
profits and management responsibilities. Yoshe has also thought about opening her own business in Mexico in
conformity with Mexican laws. She would then, hire employees in Mexico to sell the product. Another matter
Yoshe has considered is simply arranging for her products to be shipped to Mexico for sale, and she is
interested in the effect of any trade agreements in effect between the U.S. and Mexico.
55) Assuming that Yoshe decides to make the deal Sam proposes, Sam would be referred to as a(n)
and Yoshe would be referred to as a(n) .
A) Venturor; Venturee
B) Franchisee; Franchisor
C) Representative Offeror; Representative Offeree
D) Affiliator; Affiliatee
E) Franchisor; Franchisee
56) If Yoshe decides to proceed as Nora proposes, their arrangement would be a[n] .
nternational law?
A) Affiliator-affiliatee arrangement
B) Joint venture
C) Franchisee-franchisor arrangement
D) Licensing agreement
E) Subsidiary agreement
57) If Yoshe decides to open her own business in Mexico in conformity with Mexican laws and hires
employees in Mexico to sell the product, she would have opened a[n] .
A) Licensing subsidiary
B) Franchise
C) Affiliate
D) Distributorship
E) Joint venture
58) If Yoshe ships Miracle Face to Mexico for sale, she would be involved in the of goods.
A) franchising
B) licensing
C) affiliating
D) import
E) export
11
59) Which of the following should Yoshe consider concerning trade agreements between the U.S. and
Mexico?
A) The North American Free Trade Agreement
B) The Tri-Country Free Trade Agreement
C) The Multi-Country Free Trade Agreement
D) The Central American Free Trade Agreement
E) The Accessibility Trade Agreement
[Pet Products] Sonya, who has a successful pet products business, is planning to expand her operations from
the U.S. into Canada and perhaps Mexico. A friend of hers, Troy, told her that she should carefully investigate
the laws in those countries before she proceeded. Sonya responded, however, that she was not concerned
because by international treaty, and under NAFTA, so long as she is a U.S. citizen, she only has to obey the
U.S. laws. Laws of other countries would not apply to her business operations. Sonya also replied that any
other country would have the same contract laws as exists in the U.S. She tells him that the Uniform
Commercial Code (UCC) applies to all contracts and that as long as she has a written contract, she is covered.
Sonya receives a contract from a Mexican company, signs it, drops it in the mail, and tells Troy the contract is
complete.
60) Which of the following statements is correct regarding Sonya's statement that so long as she
obeys the laws of the U.S., she does not need to be concerned about laws of other countries?
A) She is accurate, but only if countries are signatories to NAFTA.
B) She is accurate.
C) She is accurate, but only in regard to laws involved with the Uniform Commercial Code.
D) She is accurate, but only in regard to laws pertaining to employment.
E) She is inaccurate.
61) Is Sonya correct that her contract with the Mexican company is complete when she drops it in the
mail?
A) No, if the UCC applies.
B) No, if the CISG applies.
C) No, because neither the UCC nor the CISG would apply.
D) Yes, because a contract need not be in writing under the CISG.
E) Yes, because both the UCC and the CISG would apply.
62) Is Sonya correct in saying that the UCC applies to all contracts and as long as she has a written
contract, she is covered?
A) She is incorrect, because the UCC only applies to the sale of goods.
B) She is correct.
C) She is incorrect. Even though the UCC applies to all contracts, the CISG applies to this
situation.
D) She is incorrect.
E) She is incorrect, because the UCC applies when the value of the contract is over $500.
12
[Weeds] Cecelia developed a product guaranteed to immediately kill weeds, but will absolutely not kill any
other type of grass or shrub. She has encountered several individuals and businesses in other countries who
would like to enter into contracts with her and market her products internationally. She consulted with Willie,
who just graduated law school and has yet to pass the bar, and asked him for advice regarding those contracts.
Willie proceeded to tell her that she should simply enter into the same type of contract with international
businesses and individuals from other countries as she would if those individuals and businesses were located
in the United States. He tells her that if there is any problem, then they will simply have to come to the United
States to settle the matter, and that any issues would be determined in Cecelia's home county, in her home
state, and under her state's law. He also mentions to her that she should consider contacting local foreign
officials in the areas in which she would like her product sold, and suggest to them that she can contribute
heavily to election campaigns, if she is allowed without any trouble, to obtain necessary business licenses and
approvals to do business.
63) Which of the following is true regarding Willie's advice that Cecelia should contact foreign
officials regarding election campaign contributions?
A) Willie was incorrect, and following his advice would put Cecelia in danger of violating
foreign laws in the countries in which she makes such offers; but she would not be in
danger of violating any U.S. laws.
B) Willie was incorrect, and following his advice would put Cecelia in danger of violating the
Foreign Corrupt Practices Act.
C) Willie was correct, and following his advice is a good idea for Cecelia.
D) Willie was incorrect, and following his advice would put Cecelia in danger of violating the
federal Unfair Competition Act.
E) Willie was incorrect, and following his advice would put Cecelia in danger of violating the
Uniform Anti-Bribery Statute.
64) What should Cecelia do if she wants some additional protection to guarantee that any dispute
with international business will be resolved in her state in the U.S.?
A) She should put a choice of law provision in the contract.
B) There is nothing she can do.
C) She should put a Hague clause in the contract.
D) She should put a choice of general jurisdiction clause in the contract.
E) She should put a forum selection agreement clause within the contract.
65) If Cecelia does not take Willie at his word and wants additional assurance that her state's law
would be applied, what should she do?
A) She should insert a GATT clause into the contract.
B) There is nothing she can do.
C) She should insert Hague evidence clause in the contract.
D) She should insert a choice-of-law clause in the contract.
E) She should insert a forum selection clause in the contract.
13
66) What was the result at the U.S. Supreme Court level in Goodyear Dunlop Tires Operations, S.A.
v. Brown, involving whether a court in North Carolina could exercise jurisdiction over the
defendant tire manufacturer and its subsidiaries who were based in Turkey and France? (The
underlying lawsuit involved the deaths of North Carolina residents in France when a bus in
which they were riding allegedly overturned due to problems with its tires.)
A) The Court ruled that based on the general contacts theory, the North Carolina court could
exercise general jurisdiction over the foreign defendants but not specific jurisdiction.
B) The Court ruled that based on the stream of commerce theory, the North Carolina court
could exercise general jurisdiction over the foreign defendants.
C) The court ruled that the North Carolina court could not exercise jurisdiction over the
defendants.
D) The Court ruled that based on the stream of commerce theory, the North Carolina court
could exercise specific jurisdiction over the foreign defendants.
E) The Court ruled that based on the general contacts theory, the North Carolina court could
exercise specific jurisdiction over the foreign defendants but not general jurisdiction.
[Lambswool tax] The U.S. and Canada are members of the World Trade Organization and GATT. Frustrated
by the tough competition from Canadian suppliers, Lambswool suppliers in the U.S. have pressured Congress
to pass a law requiring importers to pay a tax per pound of lambswool imported to the U.S. and restricting the
number of pounds of lambswool imported from specific countries, including Canada. Wholly Wool, Inc., is a
Canadian company that sells lambswool that is nearly identical to lambswool produced and sold in the U.S.
67) Does the lambswool tax violate the principle of normal trade relations, according to Article I of
GATT?
A) No, because Canada does not have most-favored-nation status.
B) No, because the U.S. is entitled to tax like goods.
C) Yes, because WTO member states must treat like goods coming from other WTO member
states on an equal basis.
D) No, because the tax does not violate NAFTA.
E) No, because WTO member states need not treat like goods coming from other WTO
member states the same.
68) Wholly Wool's President claims the United States is in violation of GATT because of the
improper restriction on the amount of lambswool that can be imported. Is he correct?
A) Yes, because the quantitative restriction was made for national economic reasons
B) No, because the U.S. is entitled to tax like goods.
C) Yes, because GATT prohibits all restrictions on importation of domestic animal products.
D) No, because GATT allows quantitative restrictions that have a rational basis.
E) No, because the goods are also produced in the United States.
69) What type of trade barrier is the lambswool tax?

A) A nontariff barrier
B) A quota
C) A quantitative restriction
D) A subsidy
E) A tariff
14
70) All of the following are examples of a nontariff barrier except .
A) A ban on trade with Canada
B) A trade embargo
C) A quota or limit on the amount of imported units.
D) A fee based on the weight of the imported units
E) A ban on the sale of lambswool
71) A forum for the settlement of the lambswool tax dispute could be:
A) The WTO
B) GATT
C) The International Monetary Fund
D) The Uruguay Round
E) The International Trade Arbitration Forum
72) Under the Dispute Settlement Understanding, who may bring an action alleging a violation of
GATT?
A) Recognized governments of WTO member states
B) Any WTO member state
C) The WTO Secretariat
D) The WTO
E) Any corporation in a WTO member state
73) Which of the following issues is not addressed by NAFTA?

A) The right to strike
B) Freedom from employment discrimination
C) Free trade in Central America
D) Protecting the environment
E) Developing common environmental standards
74) Which of the following is not true about the European Union (EU)?
A) The EU was expanded in 2004 to include the United States.
B) The EU was expanded in 2004, 2007, and 2013.
C) It is the largest regional trading bloc in the world.
D) The modern EU had its inception in three treaties from the 1950s
E) It is a customer union
75) Which of the following is the most common legal system in the world?
A) The common law system.
B) The civil law system.
C) The socialist legal system.
D) The EU
E) The United States legal system
15
76) Which of the following is not true about common law systems?
A) The judge is not responsible for gathering any evidence
B) It is an adversarial system.
C) The judge does not typically get involved in the case until trial
D) Judges are appointed or elected
E) Juries are not used.
[DroneTek] DroneTek, Inc, a Swedish company, produces drones that are sold in the United States and many
countries. DroneTek's D2000 model is a top seller in Illinois, where Reymond lives. While vacationing in
Mexico, Reymond purchased a D2000 drone. Unfortunately, during a tour in Mexico City, the blades of the
D2000 broke from the unit and caused serious and permanent injury to Reymond. Reymond wants to file suit
in Illinois against DroneTek for its defective product.
77) In order for any judgment in Illinois to be enforceable against DroneTek, what must the court
have?
A) Subject-matter jurisdiction and general personal jurisdiction
B) Subject-matter jurisdiction and either general or specific personal jurisdiction.
C) Subject-matter jurisdiction or personal jurisdiction.
D) Subject-matter jurisdiction and specific personal jurisdiction.
E) Subject-matter jurisdiction, general personal jurisdiction, and specific personal jurisdiction
78) Does an Illinois court have general personal jurisdiction over DroneTek?
A) Yes, because the D2000 was sold in Illinois
B) No, because Illinois has specific personal jurisdiction over DroneTek.
C) Yes, if the value of Reymond's claim is over $50,000.
D) No, because DroneTek does not maintain a presence in Illinois.
E) Yes, because its product was defective and injured a resident of Illinois.
79) Does an Illinois court have specific personal jurisdiction over DroneTek?
A) Yes, because the D2000 was shipped to Illinois.
B) No, because DroneTek has not purposefully availed itself of the protections of the Illinois
forum.
C) Yes, if the value of Reymond's claim is over $50,000.
D) No, because Illinois has general personal jurisdiction over DroneTek.
E) Yes, because the D2000 entered the stream of commerce.
80) Which of the following would support a claim of specific personal jurisdiction over DroneTek?
A) If all D2000s were found to have a product defect.
B) If DroneTek had a distributor in Illinois.
C) If Illinois were part of the D2000's chain of distribution.
D) If Illinois were part of DroneTek's stream of commerce.
E) If DroneTek's sales in Illinois were over $50,000.
16
81) After Reymond's accident, DroneTek created the D3000, a much safer unit. Tristyn, an
International Sales Manager with DroneTek, is negotiating a deal with BigBox Stores, a U.S.
company, to sell the D3000 exclusively in BigBox Stores in the United States. The contract from
BigBox Stores states that all disputes will be resolved in an Illinois court using Illinois law.
Tristyn knows his bosses would be furious if DroneTek had to litigate a case in Illinois, but
Tristyn believes the contract provision would not be enforceable. Is Tristyn correct?
A) Yes, because there is no jurisdiction.
B) No, because forum selection clauses are presumptively valid and will be disregarded only
if they are unreasonable.
C) Yes, because BigBox does not get to choose what type of law is applied.
D) Yes, because the plaintiff selects where to file suit.
E) Yes, because forum selection clauses are presumed unreasonable for foreign companies.
82) If DroneTek signs the contract with BigBox, under what grounds could DroneTek ignore the
clause requiring disputes to be resolved in an Illinois court.
A) If DroneTek could show fraud in the attainment of the clause in the contract.
B) If DroneTek could show the New York Convention applies.
C) If DroneTek could show the Hague Evidence Convention applies.
D) If DroneTek could show it had notice of the clause in the contract.
E) If DroneTek could show there was no stream of commerce.
83) If DroneTek signs the contract and a dispute arises with BigBox under the contract, what is likely
the most cost-effective way for DroneTek to resolve the dispute?
A) Litigate the lawsuit in Illinois, as per the forum selection clause in the contract.
B) Request arbitration as it is cheaper than litigation.
C) Litigate the lawsuit in Illinois because arbitration is not allowed under international law.
D) Litigate the lawsuit in Illinois because arbitration awards are not recognized under
international law.
E) Ignore the forum selection clause and file a counter-suit in DroneTek's home state of
Sweden.
84) Under which scenario does a company have the most presence in a foreign state?
A) Joint venture.
B) Distributorship.
C) Representative venture.
D) Licensing agreement.
E) Representative office.
17
85) Albert has a great idea for a new vacuum cleaner and received a patent for his design. Albert
finds a Canadian company to sell his vacuum cleaners in Canada, but Albert wants to ensure his
patented idea is protected. What type of contract should Albert negotiate with the Canadian
company?
A) Franchise agreement.
B) Licensing agreement.
C) Forum selection agreement.
D) Distributorship agreement.
E) Joint venture.
ESSAY QUESTIONS
86) Article 38 of the Statute of the International Court of Justice identifies four sources that may be
used to find international law. Please list those four sources.
87) Identify and describe a franchise agreement, a joint venture, and an affiliate business in relation
to international business.
88) Roberta is president of a pharmaceutical company which is based in the U.S., but has a
substantial amount of sales in other countries. Roberta's company manufactures drugs prescribed
to those infected with HIV and other illnesses. She is informed by missionary workers that
millions of people in Africa have HIV and many have died. She receives a request to provide
medication to certain locations in Africa free of charge. In addition, Roberta has been asked by a
group in the U.S. to provide medication free of charge to HIV positive individuals within the U.S.
and to donate other drugs her company makes for the treatment of other illnesses. Roberta, in
good faith and based on a good review of the company's financial position, believes that the
company can afford to donate some supplies, but not in the quantities requested by both foreign
and U.S. concerns. What do you believe is the ethical thing for Roberta to do under the
circumstances?
89) Define tariffs and how they may be calculated. Additionally, define a nontariff barrier and list and
define three types of non-tariff barriers.
90) Discuss in detail the World Trade Organization, its membership, and its function. Also explain the
normal trade relations principle, national treatment, quantitative restrictions, and dumping.
18

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MULTIPLE CHOICE QUESTIONS

3) A franchise agreement and a joint venture are the same thing.

5) The General Agreement on Tariffs and Trade became effective in 2000.

9) The European Union is an example of a customs union.

18) Which of the following is true regarding international organizations?

26) Which of the following is a tax levied on imported goods?

27) Which of the following is true regarding nontariff barriers?

28) is a comprehensive multilateral trading system designed to achieve distortion-free

29) The facilitates international cooperation in opening markets and provides a

36) Many are derived from Roman law.

37) Which of the following is a characteristic of civil law?

40) Which type of legal system exists in North Korea?

69) What type of trade barrier is the lambswool tax?

73) Which of the following issues is not addressed by NAFTA?

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