Q&A Hero

Q: Delite Candy Company hires Elton to sell Delite's products in a certain area. Delite agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours that seem appropriate. The most important factor in whether Elton is Delite's employee is a. the amount of Elton's salary. b. the control Delite has over the details of the work. c. the length of the trial period. d. the title that designates Elton's position.

Q: Ester is a lighting technician who hires out on a per-project basis to film and television production companies, as well as theatres and other venues that stage dramatic and musical performances. In this capacity, Ester is a. an agent. b. an employee. c. an independent contractor. d. a principal.

Q: Genetic Seed Company hires Howie to work on Genetic's shipping dock, accepting deliveries and dealing with other companies' drivers. With respect to Genetic, Howie is most likely a. an agent. b. an independent contractor. c. a principal. d. a work for hire.

Q: Clara is a salesperson in The Corner Store. When Carla makes a sale to Jenny, the sale is a. binding on The Corner Store. b. binding on Carla. c. binding on The Corner Store only if the owner of The Corner Store is present when the sale is made. d. not binding on anyone.

Q: KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's a. employee. b. independent contractor. c. principal. d. power of attorney.

Q: Jackson Lumber hires Owen to purchase wood from various sources on behalf of Jackson Lumber. In this relationship, Jackson Lumber is the a. employee. b. independent contractor. c. principal. d. agent.

Q: Ozzy is an officer of Prudent Financial Corporation. Ozzy serves in a representative capacity for Prudent Financial's owners. With respect to binding Prudent Financial to contracts, Ozzy is a. an agent and has the authority. b. an agent but does not have the authority. c. not an agent and does not have the authority. d. not an agent but does have the authority.

Q: When an agency relationship is terminated, the principal has a duty to personally notify third parties who knew of its existence.

Q: An agency can terminate once its purpose is achieved.

Q: A principal is responsible for all intentional torts committed by an agent.

Q: Under the doctrine of respondeat superior, an agent is liable for the principal's negligence.

Q: A principal is not liable on any contract made by the agent acting outside the scope of his or her authority.

Q: Savory Cooking Sauces, Inc., a U.S. business firm, makes and sells distinctively flavored cooking sauces. Although the recipes are secret, the ingredients could be revealed and the sauces could be reconstructed with diligent efforts. What can Savory do to prevent its products from being "decoded" and pirated abroad?

Q: The management of Sport Shoes Corporation, a U.S. firm, wants to expand into foreign investment and employment markets. They are considering either opening their own production facility in a foreign country or entering into a licensing agreement with a foreign firm. What are the advantages and disadvantages of each of these courses of action?

Q: Miranda is a U.S. citizen working in Europe for Tourist Vacations, Inc., a U.S. travel agency. Tourist fires Miranda for reasons that she believes violate U.S. antidiscrimination laws. Those laws apply a. extraterritorially. b. only to signatories of the North American Free Trade Agreement. c. only to members of the World Trade Organization. d. only within U.S. borders.

Q: Real World Sports Corporation (RWSC) is a U.S. firm with a workplace in Switzerland. Generally, RWSC must abide by U.S. anti-discrimination laws in Switzerland a. under any circumstances. b. under no circumstances. c. unless to do so would contravene the cultural norms of Switzerland. d. unless to do so would violate the law of Switzerland.

Q: Sam, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity for a. a tort allegedly committed in the United States only. b. a tort allegedly committed in the United States or overseas. c. a tort allegedly committed overseas only. d. no purpose.

Q: Qang and other foreign citizens allege human rights violations committed overseas by the government of Burma on behalf of Railway Construction Company, a U.S. firm. To seek redress for their injuries in a U.S. court, these citizens can a. allege antitrust injuries under the Sherman Act. b. bring civil suits under the Alien Tort Claims Act. c. file criminal complaints under Title VII of the Civil Rights Act. d. do nothing.

Q: Bango! Business, Inc., a U.S. firm, may have committed, in Chile, acts that would constitute, in the United States, violations of U.S. antitrust laws. These laws apply a. extraterritorially. b. only to signatories of the North American Free Trade Agreement. c. only to members of the World Trade Organization. d. only within U.S. borders.

Q: Two Japanese firmsMikato, Ltd., and Shuzushi, Ltd.enter into a joint venture in an attempt to increase their market share of the U.S. auto market. If the joint venture is not a per se violation of U.S. antitrust laws, a U.S. court could exercise jurisdiction over the firms a. if the joint venture has a substantial effect on U.S. commerce. b. if the joint venture has any effect on U.S. commerce. c. if the joint venture was entered into in the United States. d. under no circumstances.

Q: Bulbous Cordials, Inc., a U.S. firm, enters into an agreement with Columbiana Cacao, S.A., a South American firm, to fix the price of dark chocolate in the U.S. market. If the agreement is a per se violation of U.S. antitrust laws, a U.S. court could exercise jurisdiction over a. Bulbous Cordials and Columbiana Cacao. b. Bulbous Cordials only. c. Columbiana Cacao only. d. neither Bulbous Cordials nor Columbiana Cacao.

Q: Suisse Internationale, a Swiss maker of athletic equipment, enters into a price fixing agreement with Total World Sports, a U.S. wholesaler of Suisse's products. U.S. courts will apply U.S. antitrust laws if a. the agreement was made in Switzerland. b. the agreement was made in the United States. c. the price fixing has a substantial effect on U.S. commerce. d. the Swiss government agrees to be sued in the United States.

Q: Quality Energy Company, a U.S. firm, and Royal Petro, a Dutch firm, enter into a contract that includes an arbitration clause. This clause must provide that the arbitrator will be a. any specified third party. b. the American Arbitration Association. c. the Dutch Arbitration Organization. d. the International Chamber of Commerce.

Q: Telfonix Corporation, a U.S. firm, and Adex, Inc., a British firm, are parties to a contract with a forum-selection clause. The forum specified in the clause a. must be within the geographic boundaries of the United States. b. must be within the geographic boundaries of Britain. c. need not be within the geographic boundaries of either party. d. must be within the geographic boundaries of either the United States or Britain.

Q: Wytex, Inc., a U.S. firm, and Findora Commercial, a Nigerian firm, are parties to a contract that specifies that the official language of the contract is English. This is a. a choice-of-forum clause. b. a choice-of-language clause. c. a choice-of-law clause. d. an arbitration clause.

Q: To obtain a contract with the Chinese government, Bammo Engineering Corporation, a U.S. firm, gives a Chinese official a sport utility vehicle. This may violate a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the Foreign Corrupt Practices Act. d. the principle of comity.

Q: The government of Japan sets a limit on the amount of rice that can be imported from the United States. This is a. a dumping duty. b. an antidumping duty. c. a quota. d. a tariff.

Q: The United States taxes each barrel of imported oil at a flat rate. This is a. an antidumping duty. b. a dumping duty. c. a quota. d. a tariff.

Q: The United States and other members of a certain organization agree to grant normal trade relations status to each other with regard to imports and exports. This organization is a. the Convention on Contracts for the International Sale of Goods. b. the International Export-Import Bank. c. the United Nations. d. the World Trade Organization.

Q: Vieux Carr S.A., a French firm, imports its goods into the United States and offers those goods for sale at "less than fair value." "Fair value" is the price of a. comparable goods in a select "basket" of other countries. b. Vieux Carr's goods in France. c. Vieux Carr's goods in the United States. d. Vieux Carr's goods on the world market.

Q: Senator Brown and other politicians want to restrict the flow of technologically advanced products and data from the United States to other countries. To restrict or encourage exports, Congress can a. do nothing. b. assess antidumping duties. c. impose export taxes. d. set export quotas.

Q: Secure Investments, Inc., a U.S. firm, expands into international markets through a joint venture. In this situation, Secure owns a. all of the operation, and its profits and liabilities. b. all of the operation, and none of its profits and liabilities. c. none of the operation, and none of its profits and liabilities. d. part of the operation, and shares its profits and liabilities.

Q: The U.S. corporation Fun Toys, Inc. sets up a firm in China. The parent company remains in the United States and retains complete ownership of the China branch as well as complete authority and control over all phases of the operation. This is a. a franchise. b. a wholly owned subsidiary. c. a joint venture. d. direct exporting.

Q: KO Marketing Company, a U.S. firm, signs a contract with Librador Corporacion, a Chilean firm, to give Librador the right to use Innovative's animation techniques and characters in product promotions. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

Q: Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd., a Canadian firm, to give Pharma the right to sell Optima's products in Canada. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

Q: WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an Argentinean firm, for a shipment and payment for WiFi's goods. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing.

Q: Wrugged Woolens, Inc., a U.S. corporation, sets up a specialized marketing organization in Scotland by appointing a foreign agent. This is called a. direct exporting. b. indirect exporting. c. a joint venture. d. piracy.

Q: In some cases, foreign states are not immune from the jurisdiction of U.S. courts. These circumstances are governed by the a. Uniform Commercial Code. b. Foreign Sovereign Immunities Act. c. European Union. d. North American Free Trade Agreement.

Q: Metallic Metals, Inc., a U.S. firm, files a suit against a Venezuela government agency. The agency has committed a tort in the United States. Under the Foreign Sovereign Immunities Act a. the Venezuelan government agency is not immune from the jurisdiction of the U.S. courts. b. the Venezuelan government agency is immune from the jurisdiction of the U.S. courts. c. Metallic Metals cannot bring a suit against the Venezuelan agency. d. Metallic Metals must file suit in Venezuela.

Q: Soleful Shoes, Inc. owns property in Somalia. The Somalian government seizes the property. In order for the seizure to be considered an expropriation and not a confiscation, the Somalian government must a. pay just compensation to Soleful Shoes. b. give Soleful Shoes at least thirty days notice of the seizure. c. give Soleful Shoes at least ninety days notice of the seizure. d. notify the U.S. government before the seizure.

Q: U.S. Cars, a U.S. firm, owns property in Argentina. The government of Argentina seizes the property. U.S. Cars claims that this is confiscation. The government of Argentina claims that it is expropriation. The burden of proof lies with a. the U.S. government. b. the government of Argentina. c. U.S. Cars. d. the U.S. Supreme Court.

Q: UniOil, a U.S. firm, owns property in Venezuela. When the government of Venezuela seizes the property, UniOil asks a U.S. court to order the property's return. The court rules that Venezuela is exempt from the court's jurisdiction. This is a. a travesty of justice. b. the act of state doctrine. c. the doctrine of sovereign immunity. d. the principle of comity.

Q: Call Center Corporation, a U.S. firm, owns property in India. The government of India seizes the property for a proper public purpose and pays Call Center just compensation. This is a. confiscation. b. defalcation. c. dumping. d. expropriation.

Q: Sudan seizes the assets of Triage Medical, Inc., a U.S. firm. Triage's recovery from Sudan in a U.S. court may be prevented by a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the Foreign Corrupt Practices Act. d. the principle of comity.

Q: Mountain Mining Company, a U.S. firm, owns property in Bolivia. The government of Bolivia seizes the property for an illegal purpose without paying just compensation. This is a. confiscation. b. defalcation. c. dumping. d. expropriation.

Q: Premier Clothing, Inc., a U.S. firm, obtains a judgment in a U.S. court against Quang Tri, Ltd., a Vietnamese business. Whether the court's judgment will be enforced by a court in Vietnam depends on the Vietnamese court's application of a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the principle of comity. d. the World Trade Organization.

Q: The basis for India to give effect to the laws and court decisions of the United States is primarily a. courtesy and respect. b. fear and intimidation. c. admiration and envy. d. payments of cash and exchanges of property.

Q: Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and enforces the Irish court's decree. This is a. a travesty of justice. b. the act of state doctrine. c. the doctrine of sovereign immunity. d. the principle of comity.

Q: Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of these parties, a court in Portugal resolves a dispute between them. A U.S. court will most likely honor the judgment a. if it is consistent with U.S. laws and public policy. b. if it is consistent with Portuguese laws and public policy. c. if it does not benefit the U.S. to deny it. d. under no circumstances.

Q: U.S. laws that prohibit discrimination in employment apply to U.S. employees working for U.S. firms located abroad.

Q: A U.S. citizen can bring a civil suit in a U.S. court against a U.S. entity for a tort allegedly committed overseas.

Q: Any conspiracy that has a substantial effect on U.S. commerce is within the reach of the U.S. antitrust laws.

Q: Generally, a foreign government cannot sue under U.S. antitrust laws in U.S. courts.

Q: Foreign exchange markets comprise a worldwide system for buying and selling currency.

Q: Force majeure clauses in international business contracts commonly set forth the major clauses of the contracts.

Q: All international sales contracts should have a choice-of-language clause to designate the official language by which the contract will be interpreted.

Q: The primary goal of the North American Free Trade Agreement is to eliminate tariffs among the United States, Canada, and Mexico.

Q: The chief aim of the European Union and other trade organizations is to minimize trade barriers among their members.

Q: The chief aim of the World Trade Organization and other trade agreements is to maximize trade barriers among their members.

Q: Dumping is the sale of imported goods at "less than fair value."

Q: Dumping is the exporting of environmentally polluting goods to a foreign market.

Q: Quotas are limits on the amounts of goods that can be exported.

Q: Tariffs are imposed only on exports.

Q: Restrictions on imports may include quotas.

Q: A tariff is always a flat rate per unit.

Q: Restrictions on imports may include prohibitions.

Q: In a joint venture, the parent company in the United States retains complete ownership and authority over all phases of the operation.

Q: International franchisees usually do not pay fees for the license to use a trademark or trade name.

Q: A party to a licensing agreement generally agrees to pay royalties on some basis.

Q: When a U.S. firm wishes to increase its involvement in an international market, it normally establishes an agency relationship with a foreign firm.

Q: In direct exporting, a U.S. company signs a sales contract with a foreign purchaser that provides for the conditions of shipment and payment of goods.

Q: The simplest way for a U.S. firm to do business in a foreign market is to export its products directly to that market.

Q: According to the Foreign Sovereign Immunities Act, a foreign state that waived its immunity by implication is subject to the jurisdiction of the U.S. courts.

Q: According to the Foreign Sovereign Immunities Act, a foreign state that has committed a tort in the United States is protected from the jurisdiction of the U.S. courts.

Q: The doctrine of sovereign immunity cannot immunize a foreign nation from the jurisdiction of U.S. courts.

Q: Under the Foreign Sovereign Immunities Act, a foreign state can be a political subdivision of a foreign state.

Q: The Foreign Sovereign Immunities Act spells out what a "foreign state" includes.

Q: Expropriation occurs when a government seizes private property for a proper purpose and awards just compensation.

Q: The act of state doctrine does not have important consequences for firms doing business in other countries.

Q: Confiscation occurs when a government seizes private property for an illegal purpose or without just compensation.