MIB International Business Law & Ethics 2 ā Questions and Answers
Question 1: Which clause in an international commercial contract specifies which country's law will govern interpretation and enforcement of the agreement?
- Force majeure clause
- Arbitration clause
- Choice of law clause (Correct answer)
- Indemnification clause
Correct answer: Choice of law clause
A choice of law clause (also called a governing law clause) expressly identifies which jurisdiction's legal rules will apply when interpreting or enforcing the contract.
Question 2: Incoterms rules published by the International Chamber of Commerce (ICC) primarily define:
- Payment terms and currency exchange obligations in international sales
- The responsibilities of buyers and sellers regarding delivery, risk, and costs (Correct answer)
- Customs classification and tariff rates for internationally traded goods
- Accounting standards for cross-border financial transactions
Correct answer: The responsibilities of buyers and sellers regarding delivery, risk, and costs
Incoterms standardize the allocation of costs, risks, and responsibilities between buyer and seller in international trade, covering tasks like arranging transport and insurance.
Question 3: In international litigation, 'forum non conveniens' is a doctrine that allows a court to:
- Dismiss a case because it would be more appropriately heard in another jurisdiction (Correct answer)
- Compel parties to submit their dispute to international mediation before trial
- Consolidate cases from multiple countries into a single international tribunal
- Require that all disputes arising from a contract be heard where the contract was signed
Correct answer: Dismiss a case because it would be more appropriately heard in another jurisdiction
Forum non conveniens permits a court to decline jurisdiction when another forum is substantially more convenient for the parties and the interests of justice.
Question 4: The Paris Convention for the Protection of Industrial Property primarily covers:
- Copyrights, neighboring rights, and trade secrets
- Industrial property such as patents, trademarks, and industrial designs (Correct answer)
- Software, databases, and digital content protection
- Geographical indications and appellations of origin exclusively
Correct answer: Industrial property such as patents, trademarks, and industrial designs
The Paris Convention, one of the first IP treaties (1883), protects industrial property including patents, utility models, industrial designs, trademarks, and trade names.
Question 5: Investor-State Dispute Settlement (ISDS) mechanisms allow multinational corporations to:
- Appeal WTO trade panel decisions to an independent body
- File complaints with the International Court of Justice against host governments
- Resolve investment disputes with host governments outside domestic court systems (Correct answer)
- Seek compensation from competitors for unfair trade practices
Correct answer: Resolve investment disputes with host governments outside domestic court systems
ISDS clauses in bilateral investment treaties and trade agreements allow foreign investors to bring claims directly against host governments before international arbitration tribunals.
Question 6: A 'force majeure' clause in an international contract typically:
- Requires parties to renegotiate terms whenever economic circumstances change significantly
- Excuses a party from performing its obligations when extraordinary, unforeseeable events occur (Correct answer)
- Establishes predetermined financial penalties for late or non-delivery
- Designates which currency and exchange rate applies to payment obligations
Correct answer: Excuses a party from performing its obligations when extraordinary, unforeseeable events occur
Force majeure clauses relieve a party from liability for non-performance when circumstances beyond its reasonable controlāsuch as war, natural disasters, or pandemicsāmake performance impossible.
Question 7: The UNCITRAL Model Law on International Commercial Arbitration primarily serves to:
- Automatically replace domestic arbitration statutes in all UN member states
- Provide a legislative template for countries to modernize and harmonize their arbitration laws (Correct answer)
- Establish a permanent international arbitration tribunal with compulsory jurisdiction
- Set professional certification requirements for international arbitrators
Correct answer: Provide a legislative template for countries to modernize and harmonize their arbitration laws
UNCITRAL's Model Law is a non-binding legislative guide that countries can adopt to align their domestic arbitration laws with internationally accepted principles, promoting consistency across jurisdictions.
MIB International Business Law & Ethics 2
Which clause in an international commercial contract specifies which country's law will govern interpretation and enforcement of the agreement?