Business Law Question

INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
EXAMINATION NUMBER 2
FALL 2022
MULTIPLE CHOICE: Please select one answer for each of the following questions. Each question is worth
one point.
1.
All of the following statements regarding the court’s holding in United States v. Golden Ship Trading
Company are true except
A. Reliance upon the customer’s statements about the origin of goods without more is not a defense
to the failure to accurately disclose the true origin of goods
B. The government must prove negligence in misstatements contained in entry documents by clear
and convincing evidence
C. The burden of proof to demonstrate reasonable care shifts to the importer once the government
has established the falsity of statements relating to the country of origin
D. The importer failed to exercise reasonable care in ascertaining the true origin of the shirts by
failing to make inquiries of the seller
2.
All of the following statements about free trade agreements and customs unions are true except
A.
B.
C.
D.
3.
Free trade agreements and customs unions reduce or eliminate tariff barriers
Free trade agreements and customs unions reduce or eliminate non-tariff barriers
Free trade agreements and customs unions create a common external tariff
Free trade agreements and customs unions are permitted in the WTO system
If Buzz Productions, a manufacturer located in Sandy Springs, Georgia, utilizes six inputs to make
Tech souvenirs, two of which inputs originate from China, can the product be deemed North
American in origin pursuant to NAFTA and the USMCA?
A. No, because NAFTA and the USMCA require that every input originate from Canada,
Mexico or the United States
B. Yes, if the processing results in a new and different product with a different tariff
classification pursuant to Annex 401
C. No, because NAFTA and the USMCA require that all inputs originate solely from a single
source, in this case, the United States
D. Yes, because most of the inputs come from North America
4.
All of the following statements about NAFTA and the USMCA are false except
A. Canada, Mexico and the United States must allow for unlimited immigration
B. Canada, Mexico and the United States must maintain the same tariffs on all products imported
from outside of North America
C. Canada, Mexico and the United States must allow unlimited foreign investment in all
industries
D. Canada, Mexico and the United States must treat one another’s investors fairly and without
discrimination
5.
All the following statements about the NAFTA arbitral panel’s holding in In the Matter of Cross
Border Trucking are true except
A. Differing treatment of Canadian and Mexican trucks operating in the United States violated
NAFTA
B. Mexican trucking companies had an unlimited right to operate in the United States without
regulation by the U.S. government
C. Mexican trucking companies did not have an unlimited right to operate in the United States
without regulation by the U.S. government
D. The United States could impose safety restrictions on Mexican trucking companies as long as
similar restrictions were applied to Canadian trucking companies
6.
The holding in the European Court of Justice in Van Gend & Loos is best be summarized as
follows
A.
B.
C.
D.
7.
Only EU members states may enforce treaty obligations against member states
Only the European Commission may enforce treaty obligations against member states
Only the European Court of Justice may enforce treaty obligations against member states
Private businesses and individuals may enforce treaty obligations against member states
The holding in the European Court of Justice in Commission v. Germany (The Beer Case) is best
be summarized as follows
A. No national law may act as a barrier to the free flow of goods across the borders of EU
member states despite its antiquity or alleged public purpose
B. National laws may act as barrier to the free flow of goods across the borders of EU member
states if they serve a public purpose or have a long-standing history
C. All national laws are subject to review and approval by the ECJ before their enforcement
D. National laws serving important public safety and welfare purposes are immune from review
by the ECJ
8.
The functions of the European Commission, the European Parliament and the European Court of
Justice are best described as
A. Enforcing treaty obligations against member states, approving the EU budget, and serving as
the integrator of the EU through jurisprudence
B. Serving as the integrator of the EU through jurisprudence, enforcing treaty obligations against
member states, and appointing members of the Commission
C. Initiating legislative proposals, serving as the integrator of the EU through jurisprudence, and
approving legislation in specifically designated fields
D. Serving as the integrator of the EU through jurisprudence, appointing members of the
Commission, and approving the EU budget
9.
A
is binding and directly applicable in all member states, and a
sets forth the
result to be achieved but leaves to the individual states the responsibility to employ the appropriate
steps:
A.
B.
C.
D.
regulation; directive
rule; resolution
resolution; rule
directive; regulation
10.
The New York Convention requires all the following characteristics for recognition of an arbitration
agreement except
A.
B.
C.
D.
11.
Location of both parties in ratifying states
A written arbitration agreement
A subject matter capable of resolution by arbitration
A commercial or consumer-related dispute
The holding in Scherck v. Alberto Culver is best be summarized as follows
A. Enforcement of arbitration clauses provide orderliness and predictability to international
commercial transactions
B. Enforcement of arbitration clauses avoid the costliness and delays associated with litigation
C. Enforcement of arbitration clauses avoid damaging international trade and commerce
D. All the above statements are accurate summaries of the Court’s opinion
12.
The holding in Helicopteros Nacionales de Colombia v. Hall is best be summarized as follows
A. The Texas courts lacked specific personal jurisdiction to adjudicate the claims as the Colombian
defendant did not purposefully avail itself of the protections of the state of Texas
B. The Texas courts lacked general personal jurisdiction to adjudicate the claims as the Colombian
defendant did not have a continuous and systematic presence in Texas
C. The Texas courts lacked specific personal jurisdiction to adjudicate the claims as the Colombian
defendant did not have a continuous and systematic presence in Texas
D. The Texas courts lacked general personal jurisdiction to adjudicate the claims as the Colombian
defendant did not purposefully avail itself of the protections of the state of Texas
13.
The holding in Asahi Metal Industry Company v. Superior Court is best be summarized as follows
A. The California courts lacked general personal jurisdiction to adjudicate the claims as the Japanese
defendant did not purposefully avail itself of the protections of the state of California
B. The California courts lacked specific personal jurisdiction to adjudicate the claims as the Japanese
defendant did not purposefully avail itself of the protections of the state of California
C. The California courts lacked general personal jurisdiction to adjudicate the claims as the Japanese
defendant did not have a continuous and systematic presence in California
D. The California courts lacked specific personal jurisdiction to adjudicate the claims as the Japanese
defendant did not have a continuous and systematic presence in California
14.
The U.S. rule with respect to personal jurisdiction and the Internet is best be summarized as follows
A. Any presence on the Internet subjects a business to personal jurisdiction of the courts wherever
the website may be accessed
B. The rules for determining the existence of personal jurisdiction with respect to a presence on the
Internet are always identical to those for other types of business activities
C. The rules for determining the existence of personal jurisdiction with respect to a presence on the
Internet are set by the U.S. Internet Jurisdiction Statute
D. The determination of whether a presence on the Internet subjects a business to personal
jurisdiction is based upon the passive, interactive or transactional nature of the website in
question
15.
The holding in In re Union Carbide Corporation Gas Plant Disaster is best be summarized as follows
A. India was an inadequate alternative forum for the adjudication of the plaintiffs’ claims
B. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims without any
further involvement of U.S. courts
C. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims if its courts
were subject to oversight by U.S. courts
D. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims if Union
Carbide agreed to U.S.-based discovery and foreign judgment recognition procedures
16.
The holdings in Mol, Inc. v. People’s Republic of Bangladesh and Republic of Argentina v.
Weltover with respect to the Foreign Sovereign Immunities Act are best be summarized as follows
A. The contract allowing for harvesting of rhesus monkeys and the sale of bonds were sovereign
functions subject to the FSIA
B. The contract allowing for harvesting of rhesus monkeys and the sale of bonds were commercial
activities outside of the scope of the FSIA
C. The contract allowing for harvesting of rhesus monkeys was a sovereign function subject to the
FSIA, but the sale of bonds was a commercial activity outside of the scope of the FSIA
D. The contract allowing for harvesting of rhesus monkeys was a commercial activity outside of the
scope of the FSIA, but the sale of bonds was a sovereign function subject to the FSIA
Gertrude Clodhopper, an 80-year-old resident of Dustcloud, North Dakota, filed a lawsuit in Florida against
Shady Cruises, a Florida corporation, seeking damages due to a fall she suffered in the shower during a
cruise to the Bahamas. The language in Clodhopper’s ticket provided that “Any and all claims arising from
injuries occurring during a cruise shall be filed in and shall be determined pursuant to the laws of the
registry of the ship upon which the injury occurred.” This language was in very fine print in Paragraph 66
of Ms. Clodhopper’s cruise ticket. The ship upon which Ms. Clodhopper was injured was registered in
Panama. At the time of Clodhopper’s purchase of her ticket, a sales agent employed by the cruise line told
her: “Don’t worry – we’re a reputable company, easy to find and located right here in the United States.
Any problems that you may have will be resolved here.” Finally, Florida and North Dakota have several
statutes protecting senior citizens from commercial exploitation.
17.
Is the forum selection agreement contained within Clodhopper’s ticket enforceable?
A. Yes, because forum selection agreements are always enforceable under all circumstances
B. No, because the agreement was procured through fraud by the sales agent, there was a lack of
notice, enforcement would violate Florida and North Dakota’s public policy, and Panama is a
seriously inconvenient forum
C. Yes, because Clodhopper went on the cruise which constitutes an absolute defense in all
circumstances
D. No, forum selection agreements are disfavored by U.S. courts
18.
Is the choice of law clause contained within Clodhopper’s ticket enforceable?
A. No, because there is no reasonable relationship between the cruise and the selected law
B. Yes, because choice of law clauses are always enforceable under all circumstances
C. Yes, because Clodhopper went on the cruise which constitutes an absolute defense in all
circumstances
D. No, because choice of law clauses are disfavored by U.S. courts
19.
If Clodhopper resided in the Bahamas, her injury occurred in the Bahamas, and there were no forum
selection or choice of law clauses in her ticket, a Florida court considering her lawsuit against Shady
Cruises might invoke the doctrine of forum non conveniens which is defined as
A.
B.
C.
D.
20.
an abstention doctrine which permits the Florida court to decline to exercise jurisdiction
an abstention doctrine which requires a court to conclude that it does not have jurisdiction
the appropriate geographical location of a court possessing jurisdiction
an abstention doctrine which permits a court to conclude that it does not have jurisdiction
The holding in Finnish Fur Sales Company v. Juliette Shulof Furs, Inc. is best be summarized as
follows
A. New York public policy considerations prevented recognition of Finnish conditions of sale
imposing personal liability on officers of corporate bidders at auction
B. Public policy considerations are never relevant to the issue of the enforceability of choice of
law clauses
C. New York public policy considerations did not prevent the recognition of Finnish conditions
of sale imposing personal liability on officers of corporate bidders at auction
D. Choice of law clauses will only be enforced if the result applying foreign law would be the
same as the result applying U.S. law
21.
All of the following statements regarding the court’s holding in It’s Intoxicating, Inc. v. Maritim
Hotelgesellschaft mbH are true except
A. The contract did not need to be to writing as there is no statute of frauds in the CISG
B. The choice of law clause selecting Pennsylvania law was an insufficient waiver of the
applicability of the CISG as it is part of Pennsylvania law
C. The reference to Pennsylvania law was a sufficient waiver of the CISG requiring application
of the UCC
D. The waiver of the applicability of the CISG required a specific reference to the applicability
of the UCC as adopted by Pennsylvania
22.
A U.S. buyer attempted to introduce evidence of preliminary negotiations in order to interpret a
written contract in a breach of contract case against an Italian seller. Would this attempt be
successful if the CISG was applicable to the transaction?
A. No, the parol evidence rule prevents the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
B. Yes, the CISG permits the interpretation of contracts utilizing verbal agreements, past
dealings between the parties and customs about which the parties knew or should have known
C. No, the statute of frauds prohibits the introduction into evidence of preliminary negotiations
for the purpose of altering the terms of an unambiguous contract
D. Yes, the statute of frauds does not prohibit the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
23.
Does your answer to Question 22 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the CISG and the UCC are identical with respect to the use of preliminary negotiations
for the purpose of interpreting written contracts
B. Yes, the statute of frauds prohibits the introduction into evidence of preliminary negotiations
for the purpose of altering the terms of an unambiguous contract
C. No, the statute of frauds does not prohibit the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
D. Yes, the parol evidence rule prevents the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
24.
A German buyer filed a lawsuit against a U.S. seller alleging that the seller failed to perform an
oral agreement relating to a sale of goods valued at U.S. $50,000. The seller moved to dismiss the
case. If the CISG was applicable to this transaction, the court would most likely
A. hold in favor of the U.S. seller as the CISG requires all contracts for the sale of goods to be
concluded in or evidenced by a writing in order to be enforceable
B. hold in favor of the German buyer as the parol evidence rule permits the interpretation of
contracts utilizing verbal agreements, past dealings between the parties and customs that the
parties knew or should have known about
C. hold in favor of the U.S. seller as the CISG requires all contracts for the sale of goods in
excess of $500 to be concluded in or evidenced by a writing in order to be enforceable
D. hold in favor of the German buyer as the CISG provides that a contract does not have to be
concluded in or evidenced by a writing in order to be enforceable
25.
Does your answer to Question 24 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the UCC provides that a contract for the sale of goods does not have to be concluded in or
evidenced by a writing in order to be enforceable
B. Yes, the UCC requires all contracts for the sale of goods in excess of $500 to be concluded in
or evidenced by a writing in order to be enforceable
C. No, the UCC permits the interpretation of contracts utilizing verbal agreements, past dealings
between the parties and customs that the parties knew or should have known about
D. Yes, the UCC requires all contracts for the sale of goods regardless of price to be concluded
in or evidenced by a writing in order to be enforceable
26.
A Chinese offeree filed a lawsuit against a U.S. offeror claiming the existence of a contract
between them based upon a purported acceptance mailed by the offeree but never received by the
offeror. The offeror moved to dismiss the case. If the CISG was applicable to this transaction, the
court would most likely
A. hold in favor of the Chinese offeree as the CISG provides that acceptance is effective upon
mailing to the offeror even if it is never received
B. hold in favor of the U.S. offeror unless the Chinese offeree used registered or certified mail
which is always a valid means of acceptance
C. hold in favor of the U.S. offeror as the CISG provides that a mailed acceptance is only
effective upon receipt by the offeror
D. hold in favor of the Chinese offeree as the U.S. offeror failed to designate the appropriate
method of acceptance
27.
Does your answer to Question 26 change if the court decided that the UCC was applicable in this
case?
A. Yes, the UCC provides that a mailed acceptance is only effective upon receipt by the offeror
B. No, the UCC requires that the offeror designate the appropriate method of acceptance
C. Yes, the UCC provides that acceptance is effective upon mailing to the offeror even if it is
never received
D. No, the UCC requires all acceptances sent via mail to be registered or certified
28.
A U.S. buyer attempted to avoid paying a French seller for goods after ignoring the seller’s
request for an additional three days to perform the contract. The goods were delivered three days
after the date provided in the contract. If the CISG was applicable to this transaction, a court in a
subsequent lawsuit would most likely
A. hold in favor of the French seller as the U.S. buyer granted the request for additional time to
perform by failing to respond pursuant to the doctrine of nachfrist
B. hold in favor of the U.S. buyer as the French seller was in breach of contract by failing to
timely deliver the goods
C. hold in favor of the French seller as it had an unlimited right to deliver the goods whenever it
was able
D. hold in favor of the U.S. buyer as it had no obligation to respond to the French seller’s request
for additional time
29.
Does your answer to Question 28 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the CISG and the UCC are identical with respect to requests for additional time to
perform contracts for the sale of goods
B. Yes, the UCC prohibits sellers from requesting additional time to perform under all
circumstances
C. No, the French seller had an unlimited right to deliver the goods whenever it was able
D. Yes, the U.S. buyer was under no obligation to respond to the French seller’s request for
additional time as the doctrine of nachfrist does not exist in the UCC
30.
A Canadian buyer refused delivery of flowers from a U.S. seller on the basis that they were of
“miserable quality.” The U.S. seller sued for breach of contract. If the CISG was applicable to this
transaction, the court would most likely
A. hold for the Canadian buyer as the CISG requires a perfect tender of the goods
B. hold for the U.S. seller unless the Canadian buyer was able to prove a fundamental breach of
contract
C. hold for the Canadian buyer if it returned the flowers to the seller
D. hold for the U.S. seller unless the Canadian buyer could prove beyond a reasonable doubt that
the flowers were “miserable”
31.
Does your answer to Question 30 change if the parties selected the UCC pursuant to a choice of
law clause?
A. Yes, the UCC requires the seller to make a perfect tender of the goods
B. No, the CISG and the UCC are identical with respect to breach of contract
C. Yes, the UCC allows for an unlimited right to refuse delivery of nonconforming goods if the
buyer returns them to the seller within seven days
D. No, the UCC grants sellers the unlimited right to remedy nonconformities as soon as they can
do so
32.
Utilizing the facts set forth in Question 30, would the Canadian buyer be required to advise the
U.S. seller of the nature of the nonconformity as a condition to refusal of delivery pursuant to the
CISG?
A. No, the CISG does not require notification by the buyer with respect to the nature of the
nonconformities
B. Yes, but the CISG only requires notification of the general nature of the nonconformities as a
condition to refusal of delivery
C. Yes, the CISG requires specific notification of the exact nature of the nonconformities as a
condition to refusal of delivery
D. No, the CISG assumes that sellers know the nature of all nonconformities
33.
Does your answer to Question 32 change if the parties selected the UCC pursuant to a choice of
law clause?
A. No, the CISG and the UCC are identical with respect to the buyer’s notice of the nature of
nonconformities
B. Yes, the UCC assumes that sellers know the nature of all nonconformities
C. No, the UCC requires specific notification of the exact nature of the nonconformities as a
condition to refusal of delivery
D. Yes, the UCC does not require specific notice of the exact nature of the nonconformities as a
condition to refusal of delivery
34.
Buyers may avoid problems associated with the “Battle of the Forms Rule” under the CISG and
the UCC by doing all the following except
A. including a provision in their purchase orders limiting acceptance to the terms contained
therein
B. claiming that the seller’s confirmation order is not the mirror image of the buyer’s purchase
order as this will always serve as a defense
C. reviewing the seller’s confirmation order carefully upon receipt for any material alterations to
the terms of the purchase order
D. notifying the seller of objections to additional terms contained within the confirmation order
within a reasonable time of receipt
35.
All the following statements regarding the holding in Tandrin Aviation Holdings, Ltd. v. Aero Toy
Store, LLC are true except
A. The force majeure clause was not applicable to the purchaser as it made no reference to
causes for non-performance beyond either parties’ control
B. Force majeure clauses are highly disfavored, and parties are discouraged from placing them in
their contracts
C. Changes in economic and market circumstances affecting profitability of a transaction or ease
of performance are not force majeure events
D. The burden of proving the applicability of the clause is on the party seeking to excuse its nonperformance
36.
Which of the following statements best describes the term of protection for trademarks,
copyrights, and patents in the following order?
A.
B.
C.
D.
20 years, 10 years, and life of the creator plus 70 years
Life of the creator plus 70 years, 20 years, and 10 years
20 years, life of the creator plus 70 years, and 10 years
10 years, life of the creator plus 70 years, and 20 years
37.
All of the following statements about Chinese trademark law are true except
A. Landlords may be liable for the actions of their tenants who sell infringing goods
B. First to file provisions may result in litigation and buybacks of previously-protected
trademarks belonging to non-Chinese businesses
C. Famous names are not subject to trademark protection in China
D. Damages awards to non-Chinese businesses for trademark infringement are smaller in amount
than those that would be awarded by U.S. courts
38.
Patent protection extends to
A.
B.
C.
D.
39.
the first to file under TRIPS and U.S. law
the first to file under TRIPS and the first to invent under U.S. law
the first to invent under TRIPS and U.S. law
the first to invent under TRIPS and the first to file under U.S. law
A well-drafted confidentiality provision in an intellectual property rights licensing agreement
A. needs to be applicable to the licensee and require the licensee’s employees to sign separate
confidentiality agreements
B. need only be applicable to the licensee as its employees are automatically covered by the
clause
C. need only be included in an agreement with a licensee located in the developing world
D. need only be applicable to the licensee’s employees as the licensee is automatically liable for
their breaches
40.
Generic royalties, guaranteed consideration and momentum royalties are best defined as
A. identical to one another
B. payable upon actual sales, payable in advance of sales as a deposit, and payable based upon
increases in the licensee’s overall sales respectively
C. payable based upon increases in the licensee’s overall sales, payable in advance of sales as a
deposit, and payable upon actual sales respectively
D. payable upon actual sales, payable upon increases in the licensee’s overall sales, and payable
in advance of sales as a deposit respectively
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
EXAMINATION NUMBER 2
FALL 2022
MULTIPLE CHOICE: Please select one answer for each of the following questions. Each question is worth
one point.
1.
All of the following statements regarding the court’s holding in United States v. Golden Ship Trading
Company are true except
A. Reliance upon the customer’s statements about the origin of goods without more is not a defense
to the failure to accurately disclose the true origin of goods
B. The government must prove negligence in misstatements contained in entry documents by clear
and convincing evidence
C. The burden of proof to demonstrate reasonable care shifts to the importer once the government
has established the falsity of statements relating to the country of origin
D. The importer failed to exercise reasonable care in ascertaining the true origin of the shirts by
failing to make inquiries of the seller
2.
All of the following statements about free trade agreements and customs unions are true except
A.
B.
C.
D.
3.
Free trade agreements and customs unions reduce or eliminate tariff barriers
Free trade agreements and customs unions reduce or eliminate non-tariff barriers
Free trade agreements and customs unions create a common external tariff
Free trade agreements and customs unions are permitted in the WTO system
If Buzz Productions, a manufacturer located in Sandy Springs, Georgia, utilizes six inputs to make
Tech souvenirs, two of which inputs originate from China, can the product be deemed North
American in origin pursuant to NAFTA and the USMCA?
A. No, because NAFTA and the USMCA require that every input originate from Canada,
Mexico or the United States
B. Yes, if the processing results in a new and different product with a different tariff
classification pursuant to Annex 401
C. No, because NAFTA and the USMCA require that all inputs originate solely from a single
source, in this case, the United States
D. Yes, because most of the inputs come from North America
4.
All of the following statements about NAFTA and the USMCA are false except
A. Canada, Mexico and the United States must allow for unlimited immigration
B. Canada, Mexico and the United States must maintain the same tariffs on all products imported
from outside of North America
C. Canada, Mexico and the United States must allow unlimited foreign investment in all
industries
D. Canada, Mexico and the United States must treat one another’s investors fairly and without
discrimination
5.
All the following statements about the NAFTA arbitral panel’s holding in In the Matter of Cross
Border Trucking are true except
A. Differing treatment of Canadian and Mexican trucks operating in the United States violated
NAFTA
B. Mexican trucking companies had an unlimited right to operate in the United States without
regulation by the U.S. government
C. Mexican trucking companies did not have an unlimited right to operate in the United States
without regulation by the U.S. government
D. The United States could impose safety restrictions on Mexican trucking companies as long as
similar restrictions were applied to Canadian trucking companies
6.
The holding in the European Court of Justice in Van Gend & Loos is best be summarized as
follows
A.
B.
C.
D.
7.
Only EU members states may enforce treaty obligations against member states
Only the European Commission may enforce treaty obligations against member states
Only the European Court of Justice may enforce treaty obligations against member states
Private businesses and individuals may enforce treaty obligations against member states
The holding in the European Court of Justice in Commission v. Germany (The Beer Case) is best
be summarized as follows
A. No national law may act as a barrier to the free flow of goods across the borders of EU
member states despite its antiquity or alleged public purpose
B. National laws may act as barrier to the free flow of goods across the borders of EU member
states if they serve a public purpose or have a long-standing history
C. All national laws are subject to review and approval by the ECJ before their enforcement
D. National laws serving important public safety and welfare purposes are immune from review
by the ECJ
8.
The functions of the European Commission, the European Parliament and the European Court of
Justice are best described as
A. Enforcing treaty obligations against member states, approving the EU budget, and serving as
the integrator of the EU through jurisprudence
B. Serving as the integrator of the EU through jurisprudence, enforcing treaty obligations against
member states, and appointing members of the Commission
C. Initiating legislative proposals, serving as the integrator of the EU through jurisprudence, and
approving legislation in specifically designated fields
D. Serving as the integrator of the EU through jurisprudence, appointing members of the
Commission, and approving the EU budget
9.
A
is binding and directly applicable in all member states, and a
sets forth the
result to be achieved but leaves to the individual states the responsibility to employ the appropriate
steps:
A.
B.
C.
D.
regulation; directive
rule; resolution
resolution; rule
directive; regulation
10.
The New York Convention requires all the following characteristics for recognition of an arbitration
agreement except
A.
B.
C.
D.
11.
Location of both parties in ratifying states
A written arbitration agreement
A subject matter capable of resolution by arbitration
A commercial or consumer-related dispute
The holding in Scherck v. Alberto Culver is best be summarized as follows
A. Enforcement of arbitration clauses provide orderliness and predictability to international
commercial transactions
B. Enforcement of arbitration clauses avoid the costliness and delays associated with litigation
C. Enforcement of arbitration clauses avoid damaging international trade and commerce
D. All the above statements are accurate summaries of the Court’s opinion
12.
The holding in Helicopteros Nacionales de Colombia v. Hall is best be summarized as follows
A. The Texas courts lacked specific personal jurisdiction to adjudicate the claims as the Colombian
defendant did not purposefully avail itself of the protections of the state of Texas
B. The Texas courts lacked general personal jurisdiction to adjudicate the claims as the Colombian
defendant did not have a continuous and systematic presence in Texas
C. The Texas courts lacked specific personal jurisdiction to adjudicate the claims as the Colombian
defendant did not have a continuous and systematic presence in Texas
D. The Texas courts lacked general personal jurisdiction to adjudicate the claims as the Colombian
defendant did not purposefully avail itself of the protections of the state of Texas
13.
The holding in Asahi Metal Industry Company v. Superior Court is best be summarized as follows
A. The California courts lacked general personal jurisdiction to adjudicate the claims as the Japanese
defendant did not purposefully avail itself of the protections of the state of California
B. The California courts lacked specific personal jurisdiction to adjudicate the claims as the Japanese
defendant did not purposefully avail itself of the protections of the state of California
C. The California courts lacked general personal jurisdiction to adjudicate the claims as the Japanese
defendant did not have a continuous and systematic presence in California
D. The California courts lacked specific personal jurisdiction to adjudicate the claims as the Japanese
defendant did not have a continuous and systematic presence in California
14.
The U.S. rule with respect to personal jurisdiction and the Internet is best be summarized as follows
A. Any presence on the Internet subjects a business to personal jurisdiction of the courts wherever
the website may be accessed
B. The rules for determining the existence of personal jurisdiction with respect to a presence on the
Internet are always identical to those for other types of business activities
C. The rules for determining the existence of personal jurisdiction with respect to a presence on the
Internet are set by the U.S. Internet Jurisdiction Statute
D. The determination of whether a presence on the Internet subjects a business to personal
jurisdiction is based upon the passive, interactive or transactional nature of the website in
question
15.
The holding in In re Union Carbide Corporation Gas Plant Disaster is best be summarized as follows
A. India was an inadequate alternative forum for the adjudication of the plaintiffs’ claims
B. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims without any
further involvement of U.S. courts
C. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims if its courts
were subject to oversight by U.S. courts
D. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims if Union
Carbide agreed to U.S.-based discovery and foreign judgment recognition procedures
16.
The holdings in Mol, Inc. v. People’s Republic of Bangladesh and Republic of Argentina v.
Weltover with respect to the Foreign Sovereign Immunities Act are best be summarized as follows
A. The contract allowing for harvesting of rhesus monkeys and the sale of bonds were sovereign
functions subject to the FSIA
B. The contract allowing for harvesting of rhesus monkeys and the sale of bonds were commercial
activities outside of the scope of the FSIA
C. The contract allowing for harvesting of rhesus monkeys was a sovereign function subject to the
FSIA, but the sale of bonds was a commercial activity outside of the scope of the FSIA
D. The contract allowing for harvesting of rhesus monkeys was a commercial activity outside of the
scope of the FSIA, but the sale of bonds was a sovereign function subject to the FSIA
Gertrude Clodhopper, an 80-year-old resident of Dustcloud, North Dakota, filed a lawsuit in Florida against
Shady Cruises, a Florida corporation, seeking damages due to a fall she suffered in the shower during a
cruise to the Bahamas. The language in Clodhopper’s ticket provided that “Any and all claims arising from
injuries occurring during a cruise shall be filed in and shall be determined pursuant to the laws of the
registry of the ship upon which the injury occurred.” This language was in very fine print in Paragraph 66
of Ms. Clodhopper’s cruise ticket. The ship upon which Ms. Clodhopper was injured was registered in
Panama. At the time of Clodhopper’s purchase of her ticket, a sales agent employed by the cruise line told
her: “Don’t worry – we’re a reputable company, easy to find and located right here in the United States.
Any problems that you may have will be resolved here.” Finally, Florida and North Dakota have several
statutes protecting senior citizens from commercial exploitation.
17.
Is the forum selection agreement contained within Clodhopper’s ticket enforceable?
A. Yes, because forum selection agreements are always enforceable under all circumstances
B. No, because the agreement was procured through fraud by the sales agent, there was a lack of
notice, enforcement would violate Florida and North Dakota’s public policy, and Panama is a
seriously inconvenient forum
C. Yes, because Clodhopper went on the cruise which constitutes an absolute defense in all
circumstances
D. No, forum selection agreements are disfavored by U.S. courts
18.
Is the choice of law clause contained within Clodhopper’s ticket enforceable?
A. No, because there is no reasonable relationship between the cruise and the selected law
B. Yes, because choice of law clauses are always enforceable under all circumstances
C. Yes, because Clodhopper went on the cruise which constitutes an absolute defense in all
circumstances
D. No, because choice of law clauses are disfavored by U.S. courts
19.
If Clodhopper resided in the Bahamas, her injury occurred in the Bahamas, and there were no forum
selection or choice of law clauses in her ticket, a Florida court considering her lawsuit against Shady
Cruises might invoke the doctrine of forum non conveniens which is defined as
A.
B.
C.
D.
20.
an abstention doctrine which permits the Florida court to decline to exercise jurisdiction
an abstention doctrine which requires a court to conclude that it does not have jurisdiction
the appropriate geographical location of a court possessing jurisdiction
an abstention doctrine which permits a court to conclude that it does not have jurisdiction
The holding in Finnish Fur Sales Company v. Juliette Shulof Furs, Inc. is best be summarized as
follows
A. New York public policy considerations prevented recognition of Finnish conditions of sale
imposing personal liability on officers of corporate bidders at auction
B. Public policy considerations are never relevant to the issue of the enforceability of choice of
law clauses
C. New York public policy considerations did not prevent the recognition of Finnish conditions
of sale imposing personal liability on officers of corporate bidders at auction
D. Choice of law clauses will only be enforced if the result applying foreign law would be the
same as the result applying U.S. law
21.
All of the following statements regarding the court’s holding in It’s Intoxicating, Inc. v. Maritim
Hotelgesellschaft mbH are true except
A. The contract did not need to be to writing as there is no statute of frauds in the CISG
B. The choice of law clause selecting Pennsylvania law was an insufficient waiver of the
applicability of the CISG as it is part of Pennsylvania law
C. The reference to Pennsylvania law was a sufficient waiver of the CISG requiring application
of the UCC
D. The waiver of the applicability of the CISG required a specific reference to the applicability
of the UCC as adopted by Pennsylvania
22.
A U.S. buyer attempted to introduce evidence of preliminary negotiations in order to interpret a
written contract in a breach of contract case against an Italian seller. Would this attempt be
successful if the CISG was applicable to the transaction?
A. No, the parol evidence rule prevents the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
B. Yes, the CISG permits the interpretation of contracts utilizing verbal agreements, past
dealings between the parties and customs about which the parties knew or should have known
C. No, the statute of frauds prohibits the introduction into evidence of preliminary negotiations
for the purpose of altering the terms of an unambiguous contract
D. Yes, the statute of frauds does not prohibit the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
23.
Does your answer to Question 22 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the CISG and the UCC are identical with respect to the use of preliminary negotiations
for the purpose of interpreting written contracts
B. Yes, the statute of frauds prohibits the introduction into evidence of preliminary negotiations
for the purpose of altering the terms of an unambiguous contract
C. No, the statute of frauds does not prohibit the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
D. Yes, the parol evidence rule prevents the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
24.
A German buyer filed a lawsuit against a U.S. seller alleging that the seller failed to perform an
oral agreement relating to a sale of goods valued at U.S. $50,000. The seller moved to dismiss the
case. If the CISG was applicable to this transaction, the court would most likely
A. hold in favor of the U.S. seller as the CISG requires all contracts for the sale of goods to be
concluded in or evidenced by a writing in order to be enforceable
B. hold in favor of the German buyer as the parol evidence rule permits the interpretation of
contracts utilizing verbal agreements, past dealings between the parties and customs that the
parties knew or should have known about
C. hold in favor of the U.S. seller as the CISG requires all contracts for the sale of goods in
excess of $500 to be concluded in or evidenced by a writing in order to be enforceable
D. hold in favor of the German buyer as the CISG provides that a contract does not have to be
concluded in or evidenced by a writing in order to be enforceable
25.
Does your answer to Question 24 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the UCC provides that a contract for the sale of goods does not have to be concluded in or
evidenced by a writing in order to be enforceable
B. Yes, the UCC requires all contracts for the sale of goods in excess of $500 to be concluded in
or evidenced by a writing in order to be enforceable
C. No, the UCC permits the interpretation of contracts utilizing verbal agreements, past dealings
between the parties and customs that the parties knew or should have known about
D. Yes, the UCC requires all contracts for the sale of goods regardless of price to be concluded
in or evidenced by a writing in order to be enforceable
26.
A Chinese offeree filed a lawsuit against a U.S. offeror claiming the existence of a contract
between them based upon a purported acceptance mailed by the offeree but never received by the
offeror. The offeror moved to dismiss the case. If the CISG was applicable to this transaction, the
court would most likely
A. hold in favor of the Chinese offeree as the CISG provides that acceptance is effective upon
mailing to the offeror even if it is never received
B. hold in favor of the U.S. offeror unless the Chinese offeree used registered or certified mail
which is always a valid means of acceptance
C. hold in favor of the U.S. offeror as the CISG provides that a mailed acceptance is only
effective upon receipt by the offeror
D. hold in favor of the Chinese offeree as the U.S. offeror failed to designate the appropriate
method of acceptance
27.
Does your answer to Question 26 change if the court decided that the UCC was applicable in this
case?
A. Yes, the UCC provides that a mailed acceptance is only effective upon receipt by the offeror
B. No, the UCC requires that the offeror designate the appropriate method of acceptance
C. Yes, the UCC provides that acceptance is effective upon mailing to the offeror even if it is
never received
D. No, the UCC requires all acceptances sent via mail to be registered or certified
28.
A U.S. buyer attempted to avoid paying a French seller for goods after ignoring the seller’s
request for an additional three days to perform the contract. The goods were delivered three days
after the date provided in the contract. If the CISG was applicable to this transaction, a court in a
subsequent lawsuit would most likely
A. hold in favor of the French seller as the U.S. buyer granted the request for additional time to
perform by failing to respond pursuant to the doctrine of nachfrist
B. hold in favor of the U.S. buyer as the French seller was in breach of contract by failing to
timely deliver the goods
C. hold in favor of the French seller as it had an unlimited right to deliver the goods whenever it
was able
D. hold in favor of the U.S. buyer as it had no obligation to respond to the French seller’s request
for additional time
29.
Does your answer to Question 28 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the CISG and the UCC are identical with respect to requests for additional time to
perform contracts for the sale of goods
B. Yes, the UCC prohibits sellers from requesting additional time to perform under all
circumstances
C. No, the French seller had an unlimited right to deliver the goods whenever it was able
D. Yes, the U.S. buyer was under no obligation to respond to the French seller’s request for
additional time as the doctrine of nachfrist does not exist in the UCC
30.
A Canadian buyer refused delivery of flowers from a U.S. seller on the basis that they were of
“miserable quality.” The U.S. seller sued for breach of contract. If the CISG was applicable to this
transaction, the court would most likely
A. hold for the Canadian buyer as the CISG requires a perfect tender of the goods
B. hold for the U.S. seller unless the Canadian buyer was able to prove a fundamental breach of
contract
C. hold for the Canadian buyer if it returned the flowers to the seller
D. hold for the U.S. seller unless the Canadian buyer could prove beyond a reasonable doubt that
the flowers were “miserable”
31.
Does your answer to Question 30 change if the parties selected the UCC pursuant to a choice of
law clause?
A. Yes, the UCC requires the seller to make a perfect tender of the goods
B. No, the CISG and the UCC are identical with respect to breach of contract
C. Yes, the UCC allows for an unlimited right to refuse delivery of nonconforming goods if the
buyer returns them to the seller within seven days
D. No, the UCC grants sellers the unlimited right to remedy nonconformities as soon as they can
do so
32.
Utilizing the facts set forth in Question 30, would the Canadian buyer be required to advise the
U.S. seller of the nature of the nonconformity as a condition to refusal of delivery pursuant to the
CISG?
A. No, the CISG does not require notification by the buyer with respect to the nature of the
nonconformities
B. Yes, but the CISG only requires notification of the general nature of the nonconformities as a
condition to refusal of delivery
C. Yes, the CISG requires specific notification of the exact nature of the nonconformities as a
condition to refusal of delivery
D. No, the CISG assumes that sellers know the nature of all nonconformities
33.
Does your answer to Question 32 change if the parties selected the UCC pursuant to a choice of
law clause?
A. No, the CISG and the UCC are identical with respect to the buyer’s notice of the nature of
nonconformities
B. Yes, the UCC assumes that sellers know the nature of all nonconformities
C. No, the UCC requires specific notification of the exact nature of the nonconformities as a
condition to refusal of delivery
D. Yes, the UCC does not require specific notice of the exact nature of the nonconformities as a
condition to refusal of delivery
34.
Buyers may avoid problems associated with the “Battle of the Forms Rule” under the CISG and
the UCC by doing all the following except
A. including a provision in their purchase orders limiting acceptance to the terms contained
therein
B. claiming that the seller’s confirmation order is not the mirror image of the buyer’s purchase
order as this will always serve as a defense
C. reviewing the seller’s confirmation order carefully upon receipt for any material alterations to
the terms of the purchase order
D. notifying the seller of objections to additional terms contained within the confirmation order
within a reasonable time of receipt
35.
All the following statements regarding the holding in Tandrin Aviation Holdings, Ltd. v. Aero Toy
Store, LLC are true except
A. The force majeure clause was not applicable to the purchaser as it made no reference to
causes for non-performance beyond either parties’ control
B. Force majeure clauses are highly disfavored, and parties are discouraged from placing them in
their contracts
C. Changes in economic and market circumstances affecting profitability of a transaction or ease
of performance are not force majeure events
D. The burden of proving the applicability of the clause is on the party seeking to excuse its nonperformance
36.
Which of the following statements best describes the term of protection for trademarks,
copyrights, and patents in the following order?
A.
B.
C.
D.
20 years, 10 years, and life of the creator plus 70 years
Life of the creator plus 70 years, 20 years, and 10 years
20 years, life of the creator plus 70 years, and 10 years
10 years, life of the creator plus 70 years, and 20 years
37.
All of the following statements about Chinese trademark law are true except
A. Landlords may be liable for the actions of their tenants who sell infringing goods
B. First to file provisions may result in litigation and buybacks of previously-protected
trademarks belonging to non-Chinese businesses
C. Famous names are not subject to trademark protection in China
D. Damages awards to non-Chinese businesses for trademark infringement are smaller in amount
than those that would be awarded by U.S. courts
38.
Patent protection extends to
A.
B.
C.
D.
39.
the first to file under TRIPS and U.S. law
the first to file under TRIPS and the first to invent under U.S. law
the first to invent under TRIPS and U.S. law
the first to invent under TRIPS and the first to file under U.S. law
A well-drafted confidentiality provision in an intellectual property rights licensing agreement
A. needs to be applicable to the licensee and require the licensee’s employees to sign separate
confidentiality agreements
B. need only be applicable to the licensee as its employees are automatically covered by the
clause
C. need only be included in an agreement with a licensee located in the developing world
D. need only be applicable to the licensee’s employees as the licensee is automatically liable for
their breaches
40.
Generic royalties, guaranteed consideration and momentum royalties are best defined as
A. identical to one another
B. payable upon actual sales, payable in advance of sales as a deposit, and payable based upon
increases in the licensee’s overall sales respectively
C. payable based upon increases in the licensee’s overall sales, payable in advance of sales as a
deposit, and payable upon actual sales respectively
D. payable upon actual sales, payable upon increases in the licensee’s overall sales, and payable
in advance of sales as a deposit respectively
MANAGEMENT 3606
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
OVERVIEW OF THE UCC AND THE CISG
Our discussion focused on a comparison of the Uniform Commercial Code (UCC) that
governs the sale of goods in the United States and the Convention on Contracts for the
International Sale of Goods (CISG) that governs the sale of goods between persons
having their places of business in signatory states. The UCC has been adopted in all fifty
states and is the primary body of commercial sales law for domestic transactions in the
United States. If there is no UCC provision governing a particular sales transaction, resort
must then be had to the common law of contracts. By contrast, the CISG applies to the
international sale of goods between parties whose places of business are located in
signatory states. The purpose of the CISG is to unify the sales laws of signatory states.
One of the purposes of the CISG is to minimize conflict of laws issues in international
sales transactions. Conflict of laws issues arise where it is uncertain what law the court
should apply to a particular international sales transaction. However, this uncertainty can
be eliminated through inclusion of a choice of law clause in the contract designating the
state whose law applies to disputes arising between the parties. Such clauses are
enforceable in the U.S. if there is a reasonable basis for the choice. A reasonable basis for
the choice means that there is sufficient contact between the transaction and the selected
state to warrant selection of its law as governing in the event of a dispute. However,
strong public policies of the selected forum may defeat enforceability of a choice of law
clause.
There are numerous differences between the UCC and the CISG worthy of mention.
Although both bodies of law refuse to enforce illegal contracts, there is no statute of
frauds within the CISG. Parol evidence is also freely admissible to interpret contracts
entered into pursuant to the CISG. Although the CISG and the UCC define offers in a
similar fashion and share the “mirror image rule” with respect to acceptance, there is no
“mailbox rule” in the CISG. Rather, acceptances are only effective upon actual receipt by
the offeror.
The CISG provides numerous remedies for seller and buyers in the event of breach of
contract. Buyers may refuse delivery of non-conforming goods (avoidance) subject to the
seller’s right to remedy such non-conformance (cure) and obtain additional time for
performance. Buyers may also retain non-conforming goods and adjust the purchase price
to reflect the decrease in the value of the seller’s performance to the buyer. Injured sellers
and buyers may seek compensatory and consequential damages subject to their duty to
mitigate injury through obtaining substitute performance. Buyers may also utilize the
equitable remedy of specific performance in certain limited instances.
Finally, the CISG recognizes numerous factual circumstances that excuse a party from
performance of his or her international sales agreements. Objective impossibility to
perform the terms of the contract may excuse a party from performance. Examples of
objective impossibility include death, destruction of the subject matter of the contract and
intervening illegality. Performance may also be excused in circumstances of frustration of
purpose if an unforeseen event occurs that totally destroys the value of the contract.
Performance may also be excused if it would result in extreme hardship, difficulty or
unreasonable expense as a result of an unforeseen event (commercial impracticability). A
party may also avoid liability for failure to perform if such failure was attributable to an
unavoidable impediment beyond the control of the party that was not reasonably
foreseeable (frustration of performance). Such unforeseen circumstances may be
addressed through the inclusion of a force majeure clause in the sales contract excusing
the parties from performance in the event of occurrence of certain listed events.
MANAGEMENT 3606
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
OVERVIEW OF COMMERCIAL DISPUTE RESOLUTION
Chapter 3 is primarily concerned with the resolution of disputes in private international
law. The chapter evaluates litigation and arbitration as alternative methods of dispute
resolution.
Litigation in the international context raises numerous difficult issues. The initial problem
that must be resolved is that of jurisdiction – the court’s power to hear a case. Subject
matter jurisdiction is the power of the court over the type of case pending before it.
Personal jurisdiction is the power of the court over the people appearing before it. There
are two types of personal jurisdiction. General jurisdiction permits a court to adjudicate
any and all claims against a defendant regardless of whether the claims arise from the
jurisdictional forum. In order for a court to exercise general jurisdiction over a party, the
party must have a permanent or continuous or systematic presence in the forum or receive
notice of the action through tag service. Specific jurisdiction permits a court to adjudicate
claims arising from or relating to the defendant’s activities in the forum. In order for a
court to exercise specific jurisdiction over a party, the selected forum must be reasonable
and the party must purposefully avail itself of its protections. Despite these rules, the
doctrine of forum non conveniens permits U.S. courts to decline to exercise jurisdiction if
the court would be a seriously inconvenient forum for one of the parties and an adequate
alternative forum exists elsewhere.
Some of the above-noted concerns may be resolved by use of forum selection and choice
of law clauses in international contracts. A forum selection clause is a contractual
provision wherein the parties choose the location where disputes will be resolved. In the
United States, forum selection clauses are presumptively valid, and the party opposing
the selected forum bears the burden of proof in attacking the clause. A choice of law
clause is a contractual provision wherein the parties select the law of a certain state to
apply to any dispute between them arising pursuant to the contract. Choices of law
clauses are generally enforceable as long as there is a reasonable relation between the
transaction and the selected jurisdiction.
There are two final concerns with respect to litigation as a method of international dispute
resolution. Initially, although somewhat alleviated by the Hague Evidence Convention,
there are considerable obstacles to conducting discovery in cases where evidence is
located in another country. There are also concerns that may arise with respect to
enforcement of judgments in other countries. In the United States, foreign judgments are
not entitled to full faith and credit. Rather, such judgments are merely evidence of the
justice of the plaintiff’s claims. Many foreign states refuse to enforce judgments entered
in the United States especially if they are penal in nature such as judgments for back
taxes and punitive damage awards.
Arbitration is a method a dispute resolution wherein a dispute is submitted to a private
person selected in a manner provided by law or the agreement of the parties. Advantages
of arbitration as a method of dispute resolution include financial and time costs, privacy
considerations, the ability to select the decision-maker and forum and enforceability of
the final outcome. Disadvantages of arbitration include limited rights to conduct
discovery and appeal the final result, relaxed rules of evidence, the lack of intent to agree
to arbitration, limited knowledge about the arbitrator’s background, the arbitrators’
tendency to seek compromise in most cases and the lack of precedential value associated
with the arbitrator’s opinion.
The New York Convention of 1958 is a treaty that provides for the enforcement of
agreements to arbitrate and judgments rendered as a result thereof between signatory
states. However, the New York Convention lists numerous instances when arbitration
agreements or judgments entered pursuant thereto will not be enforced. Furthermore,
federal court opinions establish numerous additional grounds for the non-enforcement of
agreements to arbitrate or resulting judgments.
MANAGEMENT 3606
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
OVERVIEW OF THE EUROPEAN UNION
The European Union (EU) is a regional trade agreement known as a customs union. A
customs union occurs when two or more countries agree to reduce or eliminate tariffs
between themselves as well as adopt a common external tariff for trade with nonmember
states. Rather, as defined by the German Constitutional Court, the EU is a loose
association of states with a basis in international law formed for the purpose of forging
closer ties amongst the peoples of Europe. Membership in the EU consists of Belgium,
the Netherlands, Luxembourg, France, Germany and Italy (1952), Ireland, the United
Kingdom and Denmark (1972-73), Greece (1979-81), Spain and Portugal (1985-86) and
Austria, Sweden and Finland (1994-95). Cyprus, the Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined the EU in 2004, Romania
and Bulgaria joined in 2007, and Croatia joined in 2013.
The four primary treaties creating and governing the EU are the Treaty of Paris (1952),
the EURATOM Treaty (1958), the Treaty of Rome (1958) and the Maastricht Treaty
(1993). These treaties establish the two primary doctrines underlying the EU. The
supremacy doctrine provides that EU law preempts inconsistent national laws in fields
where a transfer of power and integration have occurred. The direct effects doctrine
allows individuals to raise rights created by specific provisions of the treaties and
implementing legislation before national courts.
The EU consists of five primary institutions as a result of the Treaty of Lisbon (2009).
The Council of Ministers of the EU is composed of one representative per member states
although votes are weighted based upon population. This institution is empowered to
coordinate economic policies and initiate legislative proposals to the Commission. The
European Council consists of the heads of state or governments of the EU members. This
body coordinates law enforcement, foreign policy and constitutional issues and is headed
by an elected President. The European Commission consists of one representative per
member state. The Commission enforces and implements treaties and legislation and
determines the legal basis for legislation proposed by the Council, forwards such
legislation to the Parliament for consideration, and enforces legislation against member
states. The Commission is headed by a President elected by the Parliament. The
European Parliament is comprised of representatives weighted by population and directly
elected by citizens of the member states to five year terms. The Parliament appoints
members of the Commission and the Commission President and must approve proposed
legislation. The European Court of Justice consists of one judge per member state each
serving a six year term. The primary task of the Court is to serve as the guardian of the
EU treaties and integrator by jurisprudence.
EU law originates from three separate sources. The primary source of EU is the treaties
themselves. The treaties are implemented through four types of legislation. Regulations
encompass general and abstract statements of law binding in their entirety upon the
member states. Directives are legislative acts binding on member states as to the result to
be achieved but leaving the means of achievement to the member states. EU legislation
may be challenged in the European Court of Justice through a number of different
actions. Judicial action may be brought against EU institutions to annul their actions, seek
damages or force them to act when deemed necessary. Actions may also be brought
against the member states themselves to force them to comply with the treaties or
legislation adopted pursuant thereto. National courts may also refer matters concerning
interpretation of the treaties or implementing legislation to the European Court of Justice
for definitive resolution.
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
EXAMINATION NUMBER 2
FALL 2022
MULTIPLE CHOICE: Please select one answer for each of the following questions. Each question is worth
one point.
1.
All of the following statements regarding the court’s holding in United States v. Golden Ship Trading
Company are true except
A. Reliance upon the customer’s statements about the origin of goods without more is not a defense
to the failure to accurately disclose the true origin of goods
B. The government must prove negligence in misstatements contained in entry documents by clear
and convincing evidence
C. The burden of proof to demonstrate reasonable care shifts to the importer once the government
has established the falsity of statements relating to the country of origin
D. The importer failed to exercise reasonable care in ascertaining the true origin of the shirts by
failing to make inquiries of the seller
2.
All of the following statements about free trade agreements and customs unions are true except
A.
B.
C.
D.
3.
Free trade agreements and customs unions reduce or eliminate tariff barriers
Free trade agreements and customs unions reduce or eliminate non-tariff barriers
Free trade agreements and customs unions create a common external tariff
Free trade agreements and customs unions are permitted in the WTO system
If Buzz Productions, a manufacturer located in Sandy Springs, Georgia, utilizes six inputs to make
Tech souvenirs, two of which inputs originate from China, can the product be deemed North
American in origin pursuant to NAFTA and the USMCA?
A. No, because NAFTA and the USMCA require that every input originate from Canada,
Mexico or the United States
B. Yes, if the processing results in a new and different product with a different tariff
classification pursuant to Annex 401
C. No, because NAFTA and the USMCA require that all inputs originate solely from a single
source, in this case, the United States
D. Yes, because most of the inputs come from North America
4.
All of the following statements about NAFTA and the USMCA are false except
A. Canada, Mexico and the United States must allow for unlimited immigration
B. Canada, Mexico and the United States must maintain the same tariffs on all products imported
from outside of North America
C. Canada, Mexico and the United States must allow unlimited foreign investment in all
industries
D. Canada, Mexico and the United States must treat one another’s investors fairly and without
discrimination
5.
All the following statements about the NAFTA arbitral panel’s holding in In the Matter of Cross
Border Trucking are true except
A. Differing treatment of Canadian and Mexican trucks operating in the United States violated
NAFTA
B. Mexican trucking companies had an unlimited right to operate in the United States without
regulation by the U.S. government
C. Mexican trucking companies did not have an unlimited right to operate in the United States
without regulation by the U.S. government
D. The United States could impose safety restrictions on Mexican trucking companies as long as
similar restrictions were applied to Canadian trucking companies
6.
The holding in the European Court of Justice in Van Gend & Loos is best be summarized as
follows
A.
B.
C.
D.
7.
Only EU members states may enforce treaty obligations against member states
Only the European Commission may enforce treaty obligations against member states
Only the European Court of Justice may enforce treaty obligations against member states
Private businesses and individuals may enforce treaty obligations against member states
The holding in the European Court of Justice in Commission v. Germany (The Beer Case) is best
be summarized as follows
A. No national law may act as a barrier to the free flow of goods across the borders of EU
member states despite its antiquity or alleged public purpose
B. National laws may act as barrier to the free flow of goods across the borders of EU member
states if they serve a public purpose or have a long-standing history
C. All national laws are subject to review and approval by the ECJ before their enforcement
D. National laws serving important public safety and welfare purposes are immune from review
by the ECJ
8.
The functions of the European Commission, the European Parliament and the European Court of
Justice are best described as
A. Enforcing treaty obligations against member states, approving the EU budget, and serving as
the integrator of the EU through jurisprudence
B. Serving as the integrator of the EU through jurisprudence, enforcing treaty obligations against
member states, and appointing members of the Commission
C. Initiating legislative proposals, serving as the integrator of the EU through jurisprudence, and
approving legislation in specifically designated fields
D. Serving as the integrator of the EU through jurisprudence, appointing members of the
Commission, and approving the EU budget
9.
A
is binding and directly applicable in all member states, and a
sets forth the
result to be achieved but leaves to the individual states the responsibility to employ the appropriate
steps:
A.
B.
C.
D.
regulation; directive
rule; resolution
resolution; rule
directive; regulation
10.
The New York Convention requires all the following characteristics for recognition of an arbitration
agreement except
A.
B.
C.
D.
11.
Location of both parties in ratifying states
A written arbitration agreement
A subject matter capable of resolution by arbitration
A commercial or consumer-related dispute
The holding in Scherck v. Alberto Culver is best be summarized as follows
A. Enforcement of arbitration clauses provide orderliness and predictability to international
commercial transactions
B. Enforcement of arbitration clauses avoid the costliness and delays associated with litigation
C. Enforcement of arbitration clauses avoid damaging international trade and commerce
D. All the above statements are accurate summaries of the Court’s opinion
12.
The holding in Helicopteros Nacionales de Colombia v. Hall is best be summarized as follows
A. The Texas courts lacked specific personal jurisdiction to adjudicate the claims as the Colombian
defendant did not purposefully avail itself of the protections of the state of Texas
B. The Texas courts lacked general personal jurisdiction to adjudicate the claims as the Colombian
defendant did not have a continuous and systematic presence in Texas
C. The Texas courts lacked specific personal jurisdiction to adjudicate the claims as the Colombian
defendant did not have a continuous and systematic presence in Texas
D. The Texas courts lacked general personal jurisdiction to adjudicate the claims as the Colombian
defendant did not purposefully avail itself of the protections of the state of Texas
13.
The holding in Asahi Metal Industry Company v. Superior Court is best be summarized as follows
A. The California courts lacked general personal jurisdiction to adjudicate the claims as the Japanese
defendant did not purposefully avail itself of the protections of the state of California
B. The California courts lacked specific personal jurisdiction to adjudicate the claims as the Japanese
defendant did not purposefully avail itself of the protections of the state of California
C. The California courts lacked general personal jurisdiction to adjudicate the claims as the Japanese
defendant did not have a continuous and systematic presence in California
D. The California courts lacked specific personal jurisdiction to adjudicate the claims as the Japanese
defendant did not have a continuous and systematic presence in California
14.
The U.S. rule with respect to personal jurisdiction and the Internet is best be summarized as follows
A. Any presence on the Internet subjects a business to personal jurisdiction of the courts wherever
the website may be accessed
B. The rules for determining the existence of personal jurisdiction with respect to a presence on the
Internet are always identical to those for other types of business activities
C. The rules for determining the existence of personal jurisdiction with respect to a presence on the
Internet are set by the U.S. Internet Jurisdiction Statute
D. The determination of whether a presence on the Internet subjects a business to personal
jurisdiction is based upon the passive, interactive or transactional nature of the website in
question
15.
The holding in In re Union Carbide Corporation Gas Plant Disaster is best be summarized as follows
A. India was an inadequate alternative forum for the adjudication of the plaintiffs’ claims
B. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims without any
further involvement of U.S. courts
C. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims if its courts
were subject to oversight by U.S. courts
D. India was an adequate alternative forum for the adjudication of the plaintiffs’ claims if Union
Carbide agreed to U.S.-based discovery and foreign judgment recognition procedures
16.
The holdings in Mol, Inc. v. People’s Republic of Bangladesh and Republic of Argentina v.
Weltover with respect to the Foreign Sovereign Immunities Act are best be summarized as follows
A. The contract allowing for harvesting of rhesus monkeys and the sale of bonds were sovereign
functions subject to the FSIA
B. The contract allowing for harvesting of rhesus monkeys and the sale of bonds were commercial
activities outside of the scope of the FSIA
C. The contract allowing for harvesting of rhesus monkeys was a sovereign function subject to the
FSIA, but the sale of bonds was a commercial activity outside of the scope of the FSIA
D. The contract allowing for harvesting of rhesus monkeys was a commercial activity outside of the
scope of the FSIA, but the sale of bonds was a sovereign function subject to the FSIA
Gertrude Clodhopper, an 80-year-old resident of Dustcloud, North Dakota, filed a lawsuit in Florida against
Shady Cruises, a Florida corporation, seeking damages due to a fall she suffered in the shower during a
cruise to the Bahamas. The language in Clodhopper’s ticket provided that “Any and all claims arising from
injuries occurring during a cruise shall be filed in and shall be determined pursuant to the laws of the
registry of the ship upon which the injury occurred.” This language was in very fine print in Paragraph 66
of Ms. Clodhopper’s cruise ticket. The ship upon which Ms. Clodhopper was injured was registered in
Panama. At the time of Clodhopper’s purchase of her ticket, a sales agent employed by the cruise line told
her: “Don’t worry – we’re a reputable company, easy to find and located right here in the United States.
Any problems that you may have will be resolved here.” Finally, Florida and North Dakota have several
statutes protecting senior citizens from commercial exploitation.
17.
Is the forum selection agreement contained within Clodhopper’s ticket enforceable?
A. Yes, because forum selection agreements are always enforceable under all circumstances
B. No, because the agreement was procured through fraud by the sales agent, there was a lack of
notice, enforcement would violate Florida and North Dakota’s public policy, and Panama is a
seriously inconvenient forum
C. Yes, because Clodhopper went on the cruise which constitutes an absolute defense in all
circumstances
D. No, forum selection agreements are disfavored by U.S. courts
18.
Is the choice of law clause contained within Clodhopper’s ticket enforceable?
A. No, because there is no reasonable relationship between the cruise and the selected law
B. Yes, because choice of law clauses are always enforceable under all circumstances
C. Yes, because Clodhopper went on the cruise which constitutes an absolute defense in all
circumstances
D. No, because choice of law clauses are disfavored by U.S. courts
19.
If Clodhopper resided in the Bahamas, her injury occurred in the Bahamas, and there were no forum
selection or choice of law clauses in her ticket, a Florida court considering her lawsuit against Shady
Cruises might invoke the doctrine of forum non conveniens which is defined as
A.
B.
C.
D.
20.
an abstention doctrine which permits the Florida court to decline to exercise jurisdiction
an abstention doctrine which requires a court to conclude that it does not have jurisdiction
the appropriate geographical location of a court possessing jurisdiction
an abstention doctrine which permits a court to conclude that it does not have jurisdiction
The holding in Finnish Fur Sales Company v. Juliette Shulof Furs, Inc. is best be summarized as
follows
A. New York public policy considerations prevented recognition of Finnish conditions of sale
imposing personal liability on officers of corporate bidders at auction
B. Public policy considerations are never relevant to the issue of the enforceability of choice of
law clauses
C. New York public policy considerations did not prevent the recognition of Finnish conditions
of sale imposing personal liability on officers of corporate bidders at auction
D. Choice of law clauses will only be enforced if the result applying foreign law would be the
same as the result applying U.S. law
21.
All of the following statements regarding the court’s holding in It’s Intoxicating, Inc. v. Maritim
Hotelgesellschaft mbH are true except
A. The contract did not need to be to writing as there is no statute of frauds in the CISG
B. The choice of law clause selecting Pennsylvania law was an insufficient waiver of the
applicability of the CISG as it is part of Pennsylvania law
C. The reference to Pennsylvania law was a sufficient waiver of the CISG requiring application
of the UCC
D. The waiver of the applicability of the CISG required a specific reference to the applicability
of the UCC as adopted by Pennsylvania
22.
A U.S. buyer attempted to introduce evidence of preliminary negotiations in order to interpret a
written contract in a breach of contract case against an Italian seller. Would this attempt be
successful if the CISG was applicable to the transaction?
A. No, the parol evidence rule prevents the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
B. Yes, the CISG permits the interpretation of contracts utilizing verbal agreements, past
dealings between the parties and customs about which the parties knew or should have known
C. No, the statute of frauds prohibits the introduction into evidence of preliminary negotiations
for the purpose of altering the terms of an unambiguous contract
D. Yes, the statute of frauds does not prohibit the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
23.
Does your answer to Question 22 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the CISG and the UCC are identical with respect to the use of preliminary negotiations
for the purpose of interpreting written contracts
B. Yes, the statute of frauds prohibits the introduction into evidence of preliminary negotiations
for the purpose of altering the terms of an unambiguous contract
C. No, the statute of frauds does not prohibit the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
D. Yes, the parol evidence rule prevents the introduction into evidence of preliminary
negotiations for the purpose of altering the terms of an unambiguous contract
24.
A German buyer filed a lawsuit against a U.S. seller alleging that the seller failed to perform an
oral agreement relating to a sale of goods valued at U.S. $50,000. The seller moved to dismiss the
case. If the CISG was applicable to this transaction, the court would most likely
A. hold in favor of the U.S. seller as the CISG requires all contracts for the sale of goods to be
concluded in or evidenced by a writing in order to be enforceable
B. hold in favor of the German buyer as the parol evidence rule permits the interpretation of
contracts utilizing verbal agreements, past dealings between the parties and customs that the
parties knew or should have known about
C. hold in favor of the U.S. seller as the CISG requires all contracts for the sale of goods in
excess of $500 to be concluded in or evidenced by a writing in order to be enforceable
D. hold in favor of the German buyer as the CISG provides that a contract does not have to be
concluded in or evidenced by a writing in order to be enforceable
25.
Does your answer to Question 24 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the UCC provides that a contract for the sale of goods does not have to be concluded in or
evidenced by a writing in order to be enforceable
B. Yes, the UCC requires all contracts for the sale of goods in excess of $500 to be concluded in
or evidenced by a writing in order to be enforceable
C. No, the UCC permits the interpretation of contracts utilizing verbal agreements, past dealings
between the parties and customs that the parties knew or should have known about
D. Yes, the UCC requires all contracts for the sale of goods regardless of price to be concluded
in or evidenced by a writing in order to be enforceable
26.
A Chinese offeree filed a lawsuit against a U.S. offeror claiming the existence of a contract
between them based upon a purported acceptance mailed by the offeree but never received by the
offeror. The offeror moved to dismiss the case. If the CISG was applicable to this transaction, the
court would most likely
A. hold in favor of the Chinese offeree as the CISG provides that acceptance is effective upon
mailing to the offeror even if it is never received
B. hold in favor of the U.S. offeror unless the Chinese offeree used registered or certified mail
which is always a valid means of acceptance
C. hold in favor of the U.S. offeror as the CISG provides that a mailed acceptance is only
effective upon receipt by the offeror
D. hold in favor of the Chinese offeree as the U.S. offeror failed to designate the appropriate
method of acceptance
27.
Does your answer to Question 26 change if the court decided that the UCC was applicable in this
case?
A. Yes, the UCC provides that a mailed acceptance is only effective upon receipt by the offeror
B. No, the UCC requires that the offeror designate the appropriate method of acceptance
C. Yes, the UCC provides that acceptance is effective upon mailing to the offeror even if it is
never received
D. No, the UCC requires all acceptances sent via mail to be registered or certified
28.
A U.S. buyer attempted to avoid paying a French seller for goods after ignoring the seller’s
request for an additional three days to perform the contract. The goods were delivered three days
after the date provided in the contract. If the CISG was applicable to this transaction, a court in a
subsequent lawsuit would most likely
A. hold in favor of the French seller as the U.S. buyer granted the request for additional time to
perform by failing to respond pursuant to the doctrine of nachfrist
B. hold in favor of the U.S. buyer as the French seller was in breach of contract by failing to
timely deliver the goods
C. hold in favor of the French seller as it had an unlimited right to deliver the goods whenever it
was able
D. hold in favor of the U.S. buyer as it had no obligation to respond to the French seller’s request
for additional time
29.
Does your answer to Question 28 change if the parties had selected the UCC pursuant to a choice
of law clause?
A. No, the CISG and the UCC are identical with respect to requests for additional time to
perform contracts for the sale of goods
B. Yes, the UCC prohibits sellers from requesting additional time to perform under all
circumstances
C. No, the French seller had an unlimited right to deliver the goods whenever it was able
D. Yes, the U.S. buyer was under no obligation to respond to the French seller’s request for
additional time as the doctrine of nachfrist does not exist in the UCC
30.
A Canadian buyer refused delivery of flowers from a U.S. seller on the basis that they were of
“miserable quality.” The U.S. seller sued for breach of contract. If the CISG was applicable to this
transaction, the court would most likely
A. hold for the Canadian buyer as the CISG requires a perfect tender of the goods
B. hold for the U.S. seller unless the Canadian buyer was able to prove a fundamental breach of
contract
C. hold for the Canadian buyer if it returned the flowers to the seller
D. hold for the U.S. seller unless the Canadian buyer could prove beyond a reasonable doubt that
the flowers were “miserable”
31.
Does your answer to Question 30 change if the parties selected the UCC pursuant to a choice of
law clause?
A. Yes, the UCC requires the seller to make a perfect tender of the goods
B. No, the CISG and the UCC are identical with respect to breach of contract
C. Yes, the UCC allows for an unlimited right to refuse delivery of nonconforming goods if the
buyer returns them to the seller within seven days
D. No, the UCC grants sellers the unlimited right to remedy nonconformities as soon as they can
do so
32.
Utilizing the facts set forth in Question 30, would the Canadian buyer be required to advise the
U.S. seller of the nature of the nonconformity as a condition to refusal of delivery pursuant to the
CISG?
A. No, the CISG does not require notification by the buyer with respect to the nature of the
nonconformities
B. Yes, but the CISG only requires notification of the general nature of the nonconformities as a
condition to refusal of delivery
C. Yes, the CISG requires specific notification of the exact nature of the nonconformities as a
condition to refusal of delivery
D. No, the CISG assumes that sellers know the nature of all nonconformities
33.
Does your answer to Question 32 change if the parties selected the UCC pursuant to a choice of
law clause?
A. No, the CISG and the UCC are identical with respect to the buyer’s notice of the nature of
nonconformities
B. Yes, the UCC assumes that sellers know the nature of all nonconformities
C. No, the UCC requires specific notification of the exact nature of the nonconformities as a
condition to refusal of delivery
D. Yes, the UCC does not require specific notice of the exact nature of the nonconformities as a
condition to refusal of delivery
34.
Buyers may avoid problems associated with the “Battle of the Forms Rule” under the CISG and
the UCC by doing all the following except
A. including a provision in their purchase orders limiting acceptance to the terms contained
therein
B. claiming that the seller’s confirmation order is not the mirror image of the buyer’s purchase
order as this will always serve as a defense
C. reviewing the seller’s confirmation order carefully upon receipt for any material alterations to
the terms of the purchase order
D. notifying the seller of objections to additional terms contained within the confirmation order
within a reasonable time of receipt
35.
All the following statements regarding the holding in Tandrin Aviation Holdings, Ltd. v. Aero Toy
Store, LLC are true except
A. The force majeure clause was not applicable to the purchaser as it made no reference to
causes for non-performance beyond either parties’ control
B. Force majeure clauses are highly disfavored, and parties are discouraged from placing them in
their contracts
C. Changes in economic and market circumstances affecting profitability of a transaction or ease
of performance are not force majeure events
D. The burden of proving the applicability of the clause is on the party seeking to excuse its nonperformance
36.
Which of the following statements best describes the term of protection for trademarks,
copyrights, and patents in the following order?
A.
B.
C.
D.
20 years, 10 years, and life of the creator plus 70 years
Life of the creator plus 70 years, 20 years, and 10 years
20 years, life of the creator plus 70 years, and 10 years
10 years, life of the creator plus 70 years, and 20 years
37.
All of the following statements about Chinese trademark law are true except
A. Landlords may be liable for the actions of their tenants who sell infringing goods
B. First to file provisions may result in litigation and buybacks of previously-protected
trademarks belonging to non-Chinese businesses
C. Famous names are not subject to trademark protection in China
D. Damages awards to non-Chinese businesses for trademark infringement are smaller in amount
than those that would be awarded by U.S. courts
38.
Patent protection extends to
A.
B.
C.
D.
39.
the first to file under TRIPS and U.S. law
the first to file under TRIPS and the first to invent under U.S. law
the first to invent under TRIPS and U.S. law
the first to invent under TRIPS and the first to file under U.S. law
A well-drafted confidentiality provision in an intellectual property rights licensing agreement
A. needs to be applicable to the licensee and require the licensee’s employees to sign separate
confidentiality agreements
B. need only be applicable to the licensee as its employees are automatically covered by the
clause
C. need only be included in an agreement with a licensee located in the developing world
D. need only be applicable to the licensee’s employees as the licensee is automatically liable for
their breaches
40.
Generic royalties, guaranteed consideration and momentum royalties are best defined as
A. identical to one another
B. payable upon actual sales, payable in advance of sales as a deposit, and payable based upon
increases in the licensee’s overall sales respectively
C. payable based upon increases in the licensee’s overall sales, payable in advance of sales as a
deposit, and payable upon actual sales respectively
D. payable upon actual sales, payable upon increases in the licensee’s overall sales, and payable
in advance of sales as a deposit respectively
MANAGEMENT 3606
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
OVERVIEW OF THE UCC AND THE CISG
Our discussion focused on a comparison of the Uniform Commercial Code (UCC) that
governs the sale of goods in the United States and the Convention on Contracts for the
International Sale of Goods (CISG) that governs the sale of goods between persons
having their places of business in signatory states. The UCC has been adopted in all fifty
states and is the primary body of commercial sales law for domestic transactions in the
United States. If there is no UCC provision governing a particular sales transaction, resort
must then be had to the common law of contracts. By contrast, the CISG applies to the
international sale of goods between parties whose places of business are located in
signatory states. The purpose of the CISG is to unify the sales laws of signatory states.
One of the purposes of the CISG is to minimize conflict of laws issues in international
sales transactions. Conflict of laws issues arise where it is uncertain what law the court
should apply to a particular international sales transaction. However, this uncertainty can
be eliminated through inclusion of a choice of law clause in the contract designating the
state whose law applies to disputes arising between the parties. Such clauses are
enforceable in the U.S. if there is a reasonable basis for the choice. A reasonable basis for
the choice means that there is sufficient contact between the transaction and the selected
state to warrant selection of its law as governing in the event of a dispute. However,
strong public policies of the selected forum may defeat enforceability of a choice of law
clause.
There are numerous differences between the UCC and the CISG worthy of mention.
Although both bodies of law refuse to enforce illegal contracts, there is no statute of
frauds within the CISG. Parol evidence is also freely admissible to interpret contracts
entered into pursuant to the CISG. Although the CISG and the UCC define offers in a
similar fashion and share the “mirror image rule” with respect to acceptance, there is no
“mailbox rule” in the CISG. Rather, acceptances are only effective upon actual receipt by
the offeror.
The CISG provides numerous remedies for seller and buyers in the event of breach of
contract. Buyers may refuse delivery of non-conforming goods (avoidance) subject to the
seller’s right to remedy such non-conformance (cure) and obtain additional time for
performance. Buyers may also retain non-conforming goods and adjust the purchase price
to reflect the decrease in the value of the seller’s performance to the buyer. Injured sellers
and buyers may seek compensatory and consequential damages subject to their duty to
mitigate injury through obtaining substitute performance. Buyers may also utilize the
equitable remedy of specific performance in certain limited instances.
Finally, the CISG recognizes numerous factual circumstances that excuse a party from
performance of his or her international sales agreements. Objective impossibility to
perform the terms of the contract may excuse a party from performance. Examples of
objective impossibility include death, destruction of the subject matter of the contract and
intervening illegality. Performance may also be excused in circumstances of frustration of
purpose if an unforeseen event occurs that totally destroys the value of the contract.
Performance may also be excused if it would result in extreme hardship, difficulty or
unreasonable expense as a result of an unforeseen event (commercial impracticability). A
party may also avoid liability for failure to perform if such failure was attributable to an
unavoidable impediment beyond the control of the party that was not reasonably
foreseeable (frustration of performance). Such unforeseen circumstances may be
addressed through the inclusion of a force majeure clause in the sales contract excusing
the parties from performance in the event of occurrence of certain listed events.
MANAGEMENT 3606
INTERNATIONAL BUSINESS LAW
PROFESSOR LUCIEN J. DHOOGE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
OVERVIEW OF COMMERCIAL DISPUTE RESOLUTION
Chapter 3 is primarily concerned with the resolution of disputes in private international
law. The chapter evaluates litigation and arbitration as alternative methods of dispute
resolution.
Litigation in the international context raises numerous difficult issues. The initial problem
that must be resolved is that of jurisdiction – the court’s power to hear a case. Subject
matter jurisdiction is the power of the court over the type of case pending before it.
Personal jurisdiction is the power of the court over the people appearing before it. There
are two types of personal jurisdiction. General jurisdiction permits a court to adjudicate
any and all claims against a defendant regardless of whether the claims arise from the
jurisdictional forum. In order for a court to exercise general jurisdiction over a party, the
party must have a permanent or continuous or systematic presence in the forum or receive
notice of the action through tag service. Specific jurisdiction permits a court to adjudicate
claims arising from or relating to the defendant’s activities in the forum. In order for a
court to exercise specific jurisdiction over a party, the selected forum must be reasonable
and the party must purposefully avail itself of its protections. Despite these rules, the
doctrine of forum non conveniens permits U.S. courts to decline to exercise jurisdiction if
the court would be a seriously inconvenient forum for one of the parties and an adequate
alternative forum exists elsewhere.
Some of the above-noted concerns may be resolved by use of forum selection and choice
of law clauses in international contracts. A forum selection clause is a contractual
provision wherein the parties choose the location where disputes will be resolved. In the
United States, forum selection clauses are presumptively valid, and the party opposing
the selected forum bears the burden of proof in attacking the clause. A choice of law
clause is a contractual provision wherein the parties select the law of a certain state to
apply to any dispute between them arising pursuant to the contract. Choices of law
clauses are generally enforceable as long as there is a reasonable relation between the
transaction and the selected jurisdiction.
There are two final concerns with respect to litigation as a method of international dispute
resolution. Initially, although somewhat alleviated by the Hague Evidence Convention,
there are considerable obstacles to conducting discovery in cases where evidence is
located in another country. There are also concerns that may arise with respect to
enforcement of judgments in other countries. In the United States, foreign judgments are
not entitled to full faith and credit. Rather, such judgments are merely evidence of the
justice of the plaintiff’s claims. Many foreign states refuse to enforce judgments entered
in the United States especially if they are penal in nature such as judgments for back
taxes and punitive damage awards.
Arbitration is a method a dispute resolution wherein a dispute is submitted to a private
person selected in a manner provided by law or the agreement of the parties. Advantages
of arbitration as a method of dispute resolution include financial and time costs, privacy
considerations, the ability to select the decision-maker and forum and enforceability of
the final outcome. Disadvantages of arbitration include limited rights to conduct
discovery and appeal the final result, relaxed rules of evidence, the lack of intent to agree
to arbitration, limited knowledge about the arbitrator’s background, the arbitrators’
tendency to seek compromise in most cases and the lack of precedential value associated
with the arbitrator’s opinion.
The New York Convention of 1958 is a treaty that provides for the enforcement of
agreements to arbitrate and judgments rendered as a result thereof between signatory
states. However, the New York Convention lists numerous instances when arbitration
agreements or judgments entered pursuant thereto will not be enforced. Furthermore,
federal court opinions establish numerous additional grounds for the non-enforcement of
agreements to arbitrate or resulting judgments.
INTERNATIONAL BUSINESS LAW
THE GATT AND THE WORLD TRADE ORGANIZATION
PROFESSOR LUCIEN J. DHOOGE
THE LAW DUDE
SCHELLER COLLEGE OF BUSINESS
GEORGIA INSTITUTE OF TECHNOLOGY
© Lucien J. Dhooge except for images
THE WORLD TRADE ORGANIZATION
PART 1 – IMPORT BARRIERS TO TRADE
IMPORT BARRIERS TO TRADE
What is a Trade Barrier?
Why do States Regulate Imports?
What are the Types of Import Barrier…