Deck 4: The Multinational Enterprise

Question 1

The American antitrust laws authorize a court to assume personal jurisdiction if a defendant has the contacts specified by Section 12 of the Clayton Act.

Answer 1

True

Question 2

With regards to trade prohibitions, Article 81 of the European Community Treaty is analogous to Section 2 of the Clayton Act.

Answer 2

False

Question 3

An agent's authority is limited to what the parent company delegates to him or her.

Answer 3

True

Question 4

A company's service office in a host nation would be considered a branch of the company.

Question 5

The principal limitation of the assumption of personal jurisdiction by U.S. courts is the federal constitutional requirement of due process.

Question 6

A corporation and its owners are considered a single juridical entity.

Question 7

A group boycott is an example of a per se violation.

Question 8

When a firm organized in one country contracts with an independent foreign firm to carry out sales or purchasing abroad, it is known as a multinational enterprise.

Question 9

Setting up a subsidiary can benefit a multinational firm because the subsidiary's company status insulates the parent from unlimited liability.

Question 10

Establishing a branch in a foreign country does not create a true multinational enterprise.

Question 11

A subsidiary is considered a separate legal entity from its parent company.

Question 12

The Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions make it a crime for individuals and juridical persons to bribe or attempt to bribe a foreign official.

Question 13

The rights and benefits accruing to the company belong to the company, not to its owners.

Question 14

A branch is an independently organized and incorporated company.

Question 15

A holding company is a branch that in turn owns other branches.

Question 16

A business that grants licenses to a foreign national or foreign business entity is not a multinational enterprise.

Question 17

A national multinational enterprise is the one in which a parent firm established in one country establishes wholly owned branches and subsidiaries in other countries.

Question 18

A representative office does not directly conduct business for the parent company.

Question 19

An international multinational enterprise consists of a single parent company that operates in foreign markets through independent agents.

Question 20

An agent (in a host nation) of a principal is subject to the laws of the principal's country.

Question 21

Under the FCPA's antibribery provisions, it is not a crime to pay an official to process a visa.

Question 22

Which of the following characterizes a national multinational enterprise?

A) It is firm organized in one country that contracts with an independent foreign firm to carry out sales or purchasing abroad.
B) It is a domestic firm that operates internationally through independent foreign agents.
C) It has a parent firm established in one country with wholly owned branches and subsidiaries in other countries.
D) It is made up of two or more parent firms from different countries that co-own operating businesses in two or more countries.

Question 23

A person or company must give its consent (either expressly or impliedly) before either will be subject to the jurisdiction of a local state.

Question 24

A(n) ________ is a domestic firm that operates internationally through independent foreign agents.

A) national multinational enterprise
B) nonmultinational enterprise
C) international multinational enterprise
D) transnational companies

Question 25

Which of the following would be a valid reason for the parent company to convert a branch into a locally organized subsidiary?

A) to insulate the parent company from local liability
B) to remove the separate legal entity status of the branch
C) to bring it under even stricter supervision of the parent company
D) to decrease local participation in the branch

Question 26

An international multinational enterprise differs from a multinational enterprise in that an international multinational enterprise ________.

A) does not do business in its parent country
B) has only one parent company with many subsidiaries
C) has two or more parent companies located in different states
D) does not use subsidiaries

Question 27

Under the common law theory of strict liability, defendants cannot be held liable if they can prove they exercised reasonable care.

Question 28

A subsidiary differs from a branch in that a subsidiary ________.

A) is just a unit or a part of the parent with no separate legal status
B) is a co-parent company
C) is considered an agent of the parent company governed by an agency contract, but not owned by the company
D) is a company organized as a separate legal entity that is owned by the parent

Question 29

By piercing the company veil, a court exposes the shareholders of the company to personal liability.

Question 30

Which of the following is true of corporations and companies being treated as separate legal entities?

A) The owners are obligated to make all decisions on behalf of the company.
B) The rights and benefits accruing to the company belong to its owners.
C) The liability of the owners becomes limited to their investment in their company.
D) The owners are obligated to pay the company's debts from their personal estates if necessary.

Question 31

Which of the following is true of a nonmultinational enterprise and its use of agents?

A) Its agents can only be individuals and not firms.
B) Its agents are considered as subsidiaries.
C) Its relationship with agents is solely governed by the laws of the parent's home country.
D) Its agents have the authority to sell the parent's products or services in that country.

Question 32

Product liability laws are part of the federal laws in the United States.

Question 33

A(n) ________ is a contractual grant of a legally recognized right which can be used as an international marketing tool whereby trade secrets, minor technological methods or processes, or protectable business plans and processes of an entity in one nation are extended to a party in a different nation.

A) license
B) letter of credit
C) copyright
D) deed

Question 34

Article 82 of the European Community Treaty does not have an exception clause.

Question 35

The Japanese Civil Code uses the concept of "strict liability" for imposing liability for defective products.

Question 36

Which of the following is a similarity between a national multinational enterprise and an international multinational enterprise?

A) Both of them use subsidiaries.
B) Both of them have more than one parent company.
C) Both of them only have one parent-state.
D) Both of them don't use branches.

Question 37

Which of the following is most likely to be true of a branch office in the United States?

A) It is liable for the debts of the parent company.
B) It is considered a separate legal entity of the parent company.
C) It does not have to be registered with any state agency.
D) It is not liable for its own debts.

Question 38

A blocking statute makes it easier for a successful plaintiff to enforce a U.S. judgment outside the United States.

Question 39

The FCPA's antibribery provisions are only applicable to businesses and not individuals.

Question 40

A(n) ________ does not actually conduct business; rather, it functions as a foreign contact point where interested parties can obtain information about a particular firm.

A) representative office
B) branch
C) subsidiary
D) franchise

Question 41

Once a particular kind of activity is classified as a ________violation, the courts do not apply the case-by-case rule of reason analysis but proceed directly to a consideration of the appropriate remedy in the particular case.

A) rule of reason
B) per se
C) consent decree
D) Noerr doctrine

Question 42

Which of the following is the reason why the Webb Pomerene Act is cited as a criticism of the United States' antitrust laws?

A) because it encourages foreign companies to invest in the United States
B) because it exempts U.S. export associations from compliance with the Sherman Act
C) because it provides tax cuts for subsidiaries of foreign-national companies in the United States
D) because it allows for punitive treble damages to be brought by private plaintiffs

Question 43

Which of the following is true of a subsidiary?

A) A subsidiary is used to operate a parent company's holding company.
B) A subsidiary does not actually conduct business; rather, it functions as a foreign contact point.
C) A subsidiary insulates the parent company from unlimited liability.
D) A subsidiary is a part of the parent company and is not separately incorporated.

Question 44

The American antitrust laws authorize a court to assume personal jurisdiction if a defendant has the contacts specified by ________.

A) the Federal Trade Commission Act
B) Section 1 of the Sherman Act
C) an applicable state long arm statute
D) the Robinson-Patman Act

Question 45

Which of the following is true of a company's agent situated in a foreign country?

A) An agent is not subject to the supervision of its parent company.
B) An agent's authority is equal to that of the parent company.
C) An agent has to be separately incorporated in the foreign country to be considered legal.
D) An agent is not subject to the laws of the parent-nation.

Question 46

Which of the following describes the long arm statute?

A) A law defining the kinds of partnerships that can be formed between corporations or individuals and foreign companies.
B) A law defining the conduct of a foreign person within a state that will subject that person to the jurisdiction of the state.
C) A law defining the kind of companies that a company can set up in a foreign country.
D) A law defining the kinds of awards that can be sought in an anti-trust case against the government.

Question 47

Under the ________, companies carrying on business outside the United States will come within the subject-matter jurisdiction of an American court if their business activity is intended to affect U.S. commerce and is not de minimis.

A) national eligibility test
B) minimum contact test
C) effects test
D) per se test

Question 48

The ________ is a rule applied by courts on a case-by-case basis requiring them to consider all of the circumstances in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition in violation of Sherman Act Section 1.

A) per se rule
B) choice of law rule
C) rule of reason
D) rule of reciprocity

Question 49

________ is a per se violation, where a seller at one level sells goods to a buyer at a different level on the condition that the latter will not resell below an agreed-upon price.

A) Group boycott
B) Vertical price fixing
C) Horizontal price fixing
D) Horizontal market division

Question 50

Which of the following tests is used to determine whether a court has subject-matter jurisdiction in an American antitrust case?

A) the effects test
B) the minimum contact test
C) the national eligibility test
D) the per se test

Question 51

________ prohibits contracts, agreements, and conspiracies that restrain interstate or international trade.

A) Section 2 of the Taft-Hartley Act
B) Section 2(a) of the Robinson-Patman Act
C) Section 4 of the Clayton Act
D) Section 1 of the Sherman Act

Question 52

The Robinson-Patman Act of 1936 was added to the panoply of American anti-trust law to make ________ illegal.

A) anticompetitive mergers
B) tying arrangements
C) monopolization
D) price discrimination

Question 53

The _______ is a jurisdictional test required by due process that looks to see if a person had such associations with a state, did business within the state, and could reasonably have anticipated that it would have to defend itself there.

A) effects test
B) minimum contacts test
C) jurisdictional rule of reason test
D) per se test

Question 54

The ________ was enacted in 1914 to expand the enforcement provisions of the Sherman Antitrust Act. It defines exclusive dealing and tying clauses, mergers that result in monopolies, and interlocking directorates as being unfair business practices.

A) Federal Trade Commission Act
B) Sherman Act
C) Robinson-Patman Act
D) Clayton Act

Question 55

Once a particular kind of activity is classified as a per se violation, the courts then ________.

A) apply the case-by-case rule of reason analysis for that particular case
B) directly consider an appropriate remedy for that particular case
C) consider the level of justifiability of the violation for that particular case
D) check if the violation breaches Section 1 of the Sherman Act

Question 56

Which of the following acts forbids monopolies and attempts to monopolize commerce or trade either between the states of the United States or in international commerce affecting the United States?

A) Section 2 of the Sherman Act
B) Section 2(a) of the Robinson-Patman Act
C) Section 4 of the Clayton Act
D) Section 7 of the Clayton Act

Question 57

A(n) ________ is a subsidiary company that in turn owns other subsidiaries.

A) agency
B) representative office
C) branch
D) holding company

Question 58

The ________ is a federal statute enacted in 1890 that forbids combinations and conspiracies in restraint of interstate and international trade.

A) Clayton Act
B) Sherman Antitrust Act
C) the Federal Trade Commission Act
D) Robinson-Patman Act

Question 59

Which of the following is true of American anti-trust laws?

A) It does not require the defendant to have personal jurisdiction.
B) It is not affected by the long arm statute.
C) It can only award treble charges in cases involving the government.
D) It can be applied only when the court has subject-matter jurisdiction.

Question 60

A ________ is an association of persons or companies that are involved in a collaboration for more than a transitory period.

A) joint venture
B) branch
C) representative office
D) subsidiary

Question 61

According to the doctrine of ________, a municipal court will decline to hear a dispute when it can be better or more conveniently settled in a foreign council.

A) negligence per se
B) privity of contract
C) res ipsa loquitur
D) forum non conveniens

Question 62

How are multinational enterprises regulated by the home state?

Question 63

________ are laws enacted in some countries to obstruct the extraterritorial application of U.S. antitrust laws by limiting a plaintiff's right to obtain evidence or to enforce a judgment, and that allows a defendant to bring suit locally to recover punitive damages paid in the United States.

A) Blocking statutes
B) Jim Crow statutes
C) Consent decrees
D) Whistleblower statutes

Question 64

How do the courts determine the members of a common enterprise?

Question 65

Apart from the long arm statute, what other criteria must a claimant fulfill in order to establish personal jurisdiction requirements of U.S. products liability laws?

Question 66

Which of the following doctrines excuses an injured claimant who can show that a product was defective when it left the hands of the defendant from having to prove that the defendant caused the defect?

A) the Mackay doctrine
B) the doctrine of negligence per se
C) the doctrine of privity
D) the doctrine of res ipsa loquitur

Question 67

Which of the following is the reason why alter ego companies come under the purview of piercing the company veil?

A) because the company has no decision-making power independent of its parent company
B) because the company had insufficient capital when being formed
C) because the shareholders use company assets for personal benefit
D) because the shareholders of that company assumes personal liability

Question 68

Describe a joint venture as a business model.

Question 69

Which of the following describes sharp practices of business?

A) business dealings meant to obtain a benefit for a person or firm regardless of the means used
B) business exchanges where the manufacturer and consumer are the same
C) business plans that also take social responsibility into account
D) business practices that are ethical and moral

Question 70

How is the theory of negligence in product liability different in common law states compared to countries that don't follow common law?

Question 71

State the article in the European Community Treaty that is analogous to Section 2 of the Sherman Act.

Question 72

A legal relationship sufficiently close and direct to support a legal claim on behalf of or against another with whom the relationship exists is referred to as ________.

A) accommodation
B) privity
C) mutual consent
D) claim preclusion

Question 73

Discuss the importance of the separate legal identity of juridical entities in business.

Question 74

Briefly describe the subordinate structures of representative office, an agent, and a branch.

Question 75

________ is an expression indicating that the legal fiction that a company is a separate legal entity will be set aside and the shareholders of the company will be held liable for its conduct as if they were partners in a partnership.

A) Fruit of the poisonous tree
B) Pierce the company veil
C) Ball park figure
D) Right of first refusal

Question 76

What are the three tests that are used by the jurisdictional rule of reason in determining jurisdiction in anti-trust cases?

Question 77

What are the different types of per se violations? How does a court deal with a per se violation?

Question 78

Which of the following would constitute as an example of negligence per se?

A) Mellissa not checking if the new pair of jeans she bought was already defective
B) Stella receiving a consignment of books that were damaged during shipment
C) Matt buying a refrigerator that did not meet statutory safety requirements
D) Shelton hurting himself with a drill because of a faulty lever