Chapter 9.
- The contrast between the common-law family and the socialist-law family.
The common law family refers to the laws which they primarily rely on case law and precedent instead of statutory law. In such cases, the courts have the mandate to declare statutory laws unconstitutional. On the other hand, the socialist-law family refers to laws based on the teachings of Karl Marx, and no private property is recognized. These laws encourage the collectivization of property and the means of production. They also seek to guarantee national security. In his classical theory, Marx states that both the law and the state will fade away as people are better educated to socialism and advance towards the ultimate stage of pure communism (Kubasek, Brennan and Browne, 1999).
- The method that is less risky for a foreign multinational company engaging in international business.
There are many methods of engaging in international business, such as trade, international licensing and franchising, and foreign direct investment. From the stated methods, trade is considered less risky because it demands little involvement with a foreign buyer or seller (Kubasek et al., 1999).
- Define the following
- Expropriation – This refers to taking private property by a host country government for economic or political purposes or reasons(Kubasek et al., 1999).
- The doctrine of sovereign immunity states that foreign-owned private property has been expropriated and is immune from the jurisdiction of courts in the owner’s country (Kubasek et al., 1999).
- Act-of-state doctrine – This is a state that each nation is bound to respect others’ independence, and the courts of one country will not sit in judgment on the acts of the courts of another nation (Kubasek et al., 1999).
- Arbitration clause – A legal clause that defines a dispute resolution method whereby two parties submit their disagreement to a neutral decision-maker. The two parties are required to abide by the decision made (Kubasek et al., 1999)
- choice-of-forum clause – A forum selection clause in a contract with a conflict of laws element which allows the conflicting parties to agree that any disputes relating to that contract will be resolved in a specific forum. They usually operate in conjunction with a choice of law clause, which determines the proper law of the relevant contract (Kubasek et al., 1999).
- Why was the GATT Pact, creating the World Trade Organization, so important to doing international business? Explain.
The GATT Pact, which created the World Trade Organization (WTO), was significant in doing international business because it gave the WTO the power to enforce the new trade, which evolved out of seven rounds of GATT negotiations with a participation of more than one hundred and forty nations. They all agreed to reduce international trade tariffs and subsidies by an average of a third tariff on goods for a decade, which also included agricultural tariffs. It, therefore, helped create a fair room for undertaking international trade with the moderation of prices (Kubasek et al., 1999).
- Is arbitration preferred to litigation as a means of resolving international business disputes?
Arbitration is preferred to litigation as a means of resolving international business because it is quicker than litigation and a less public process compared to litigation (Kubasek et al., 1999).
- Three requirements for a valid offer.
A contractual process begins with an offer.
The first requirement is that the offer must have an objective intention to get into the contract. In this case, the court critically examines the words, writing words and there are deliberate omissions that compromise the offer
Second, the offer is required to be definite. This means that there must be some reference to the subject of the matter, the quantity of the items being offered in the contract, and the price of each item well stated. The third requirement is that the offer must be communicated to the party being provided the agreement, known as the offeree, by the intended offeror (Kubasek et al., 1999).
- Explain how an offer can be terminated.
Kubasek et al. (1999) state that there are different ways to terminate an offer. They include
Lapse of time whereby the offeree failed to respond within a reasonable time
Death of one of the parties involved in the agreement
Destruction of the subject matter whereby if an item in the contract cannot be provided due to natural occurrences or an accident that is beyond the powers and not faulted by the offered
Rejection by the offeree in the case he or she does not accept the offer
Revocation by the offender whereby he or she decides to withdraw the offer
- The difference between liquidated and unliquidated debts.
A liquidated debt occurs when there is no conflict in the debt amount or the terms of aa debt, while an unliquidated debt occurs when the parties involved have a dispute on the amount owed by the debtor (Kubasek et al., 1999).
Chapter 11
- “impossibility of performance”
Impossibility of performance refers to a situation whereby a party cannot perform or exercise the terms of a contract either legally or physically. This may be due to the occurrence of a circumstance or event that had not been foreseen (Kubasek et al., 1999).
- The standard a court uses to award dollar damages when lost profits are involved
To award damages incurred due to lost profits, the court uses the standard measures of compensatory damages, which is monetary damage awarded to the affected party. In this case, the difference between the value of breaching the promised performance and the value of the actual performance is calculated. The difference is awarded to the injured party (Kubasek et al., 1999).
- Why should a party who has not breached a contract be required to mitigate the breaching party’s damages?
A party who has not breached a contract is required to mitigate the damages of the breaching party because, under the law, they are obligated to reduce or minimize the amount of damages to the extent reasonable. Also, because damages cannot be fully recovered of the losses could have reasonably been avoided. Therefore, the non-breaching party’s failure to use reasonable diligence in mitigating the damages from happening means that any award to the losses incurred will be reduced by the amount that could have reasonably been prevented (Kubasek et al., 1999).