MIB International Business Law & Ethics 1 — Questions and Answers
Question 1: What is the primary international convention governing contracts for the sale of goods across national borders?
- UNIDROIT Principles of International Commercial Contracts
- United Nations Convention on Contracts for the International Sale of Goods (CISG) (Correct answer)
- Hague Convention on Private International Law
- New York Convention on the Recognition of Arbitral Awards
Correct answer: United Nations Convention on Contracts for the International Sale of Goods (CISG)
The CISG, adopted in 1980, is the primary multilateral treaty governing international sales contracts and has been ratified by over 90 countries.
Question 2: Which legal system, predominant in continental Europe and Latin America, is primarily based on comprehensive written codes and statutes rather than judicial precedent?
- Common law
- Islamic law (Sharia)
- Civil law (Correct answer)
- Customary law
Correct answer: Civil law
Civil law systems, derived from Roman law, rely on codified statutes as the primary source of law, with judges applying codes rather than creating precedent.
Question 3: The U.S. Foreign Corrupt Practices Act (FCPA) primarily prohibits:
- Foreign companies from establishing subsidiaries in the United States
- U.S. companies and individuals from bribing foreign government officials to obtain business (Correct answer)
- International transfers of intellectual property without government approval
- Importation of goods manufactured with forced labor
Correct answer: U.S. companies and individuals from bribing foreign government officials to obtain business
The FCPA makes it unlawful for U.S. persons and entities to bribe foreign government officials for the purpose of obtaining or retaining business.
Question 4: Which organization administers the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)?
- World Intellectual Property Organization (WIPO)
- World Trade Organization (WTO) (Correct answer)
- United Nations Conference on Trade and Development (UNCTAD)
- International Monetary Fund (IMF)
Correct answer: World Trade Organization (WTO)
TRIPS is administered by the WTO and sets minimum standards for IP protection that all WTO member countries must implement in their national laws.
Question 5: The New York Convention of 1958 is primarily designed to:
- Recognize and enforce foreign arbitral awards in signatory countries (Correct answer)
- Resolve trade disputes between sovereign nations at the WTO
- Establish a permanent international commercial arbitration court
- Harmonize national contract laws across member states
Correct answer: Recognize and enforce foreign arbitral awards in signatory countries
The New York Convention obligates signatory states to recognize and enforce arbitral awards made in other signatory countries, making it a cornerstone of international arbitration.
Question 6: Which of the following is NOT a characteristic of common law legal systems?
- Judicial decisions create binding precedent (stare decisis)
- Reliance on case law as a primary source of law
- Comprehensive statutory codes serve as the primary legal source (Correct answer)
- Adversarial court proceedings where parties present competing arguments
Correct answer: Comprehensive statutory codes serve as the primary legal source
Comprehensive statutory codes as the primary legal source is a feature of civil law systems; common law systems rely primarily on case law and judicial precedent.
Question 7: The doctrine of 'sovereign immunity' in international business law holds that:
- Multinational corporations are immune from foreign tax jurisdiction
- A state cannot be sued in the courts of another country without its consent (Correct answer)
- International treaty obligations automatically override conflicting national laws
- Foreign investors are fully protected from government expropriation of assets
Correct answer: A state cannot be sued in the courts of another country without its consent
Sovereign immunity is the principle that a sovereign state cannot be compelled to appear before a foreign court without its consent, rooted in the concept that equals cannot have jurisdiction over equals.
MIB International Business Law & Ethics 1
What is the primary international convention governing contracts for the sale of goods across national borders?