Deck 52: Domestic and International Sales and Lease Contracts

Question 1

Web Resource Inc. and World Market Ltd., businesses located in different countries, agree to a contract. Like different individuals, Web and World have different perceptions of what the agreement between them is and what it means to fulfill it. This is because

A)in every country arbitration is the preferred method of dispute resolution.
B)in every country it is acceptable to file an action in a court to resolve a dispute.
C)a business contract is only the expression of the framework of a deal.
D)Web and World are influenced by different cultures.

Answer 1

D

Question 2

The label on Cameron Ltd.'s beer reads, "British quality" and, beneath that phrase in small print, "Product of the U.S.A." David and other consumers file a class action against the brewer over the fact that its beer is not brewed in Great Britain. The plaintiffs' best ground for a possible recovery is most likely

A)misleading advertising.
B)unethical labeling practices.
C)inconsistent puffery.
D)inferior taste.

Answer 2

A

Question 3

The label on AmBeer Inc.'s beer reads, "U.S. quality" and, beneath that phrase in small print, "Made with Imported Hops." Bruce and other consumers file a class action against the brewer in California, which prohibits the use of an unqualified U.S.-origin claim. The plaintiffs' best ground for a possible recovery is most likely

A)misleading advertising.
B)unethical labeling practices.
C)inconsistent puffery.
D)inferior taste.

Answer 3

A

Question 4

Online retailers that have a physical presence within a state must collect state taxes on any Web sales made to residents of that state. Sell2U.com Inc., an online retailer based in California, pays Tracker Web Services, which is located within New York, to direct traffic to Sell2U.com's site. If Sell2U.com must collect and remit taxes on its sales to New York residents, it is most likely because

A)Sell2U.com's deal with Tracker falls within New York's definition of physical presence.
B)Congress has explicitly chosen to tax Internet sales.
C)the United States Supreme Court has ruled that a state can compel an out-of-state business to collect and remit state taxes.
D)New York requires its residents to self-report their purchases and pay use taxes to the state.

Question 5

National Company and Omni Corporation are businesses located in different countries. Representatives of National and Omni transact a deal over their cellphones. Under the United Nations Convention on the Use of Electronic Communications in International Trade (ECC), which National's country has adopted, this deal is

A)as valid and enforceable as a contract on paper.
B)invalid because Omni Supply's country has not adopted the ECC.
C)invalid because it is not a contract on paper.
D)invalid because the businesses are located in different countries.

Question 6

Quick Trip, an online travel company, buys blocks of rooms from Peak Season Inn, a hotel in Ocean City, at a wholesale rate. Quick resells the rooms to consumers at a retail rate. One recent effort by cities to collect taxes from e-commerce has focused on

A)hotels that sell blocks of rooms at wholesale rates.
B)non-resident consumers who reserve rooms in in-state hotels.
C)online travel companies.
D)the dire financial straits of the cities during the latest recession.

Question 7

Global Trade Inc. does business throughout the world. As an international corporation, Global can be subject to conventions issued by the United Nations Commission on International Trade Law. Conventions are

A)designed to establish binding legal obligations.
B)issued to recommend provisions for individual nations to adopt as part of their national law.
C)promulgated to suggest non-binding guidelines for commercial norms.
D)compiled at international convocations to represent consensus opinions.

Question 8

Home Grown Inc. is a firm based in the United States that does business overseas. When entering into a business contract, deciding which terms to include, and choosing a method to resolve a dispute, Home should

A)rely solely on legal principles rather than the business relationship.
B)assume that a party in another country has the same contractual expectations as a party in the United States.
C)be alert to cultural influences.
D)stay inflexible in the face of others' social and cultural practices.