No Plagiarism Please: Read Materials In Chapters 9–10

No Plagiarismplease Read Materials In Chapters 9 10 In The Textbook

No plagiarism. Please read materials in chapters 9 and 10 in the textbook, and outside materials as a guide to answer the questions. Please number the answers. Reference: International Business Law: Text, Cases, and Readings (6th ed.) by August R., Mayer D., & Bixby, M. (2013). ISBN Chapter 9 - pg. 538.

Question #1: Alvin, Bob, Calvin, Don, and Edgar are friends who enroll in a university course to study international business law. The textbook required for the course costs $50, which the five friends agree is expensive. They agree to chip in $10 each and buy one copy from a bookstore. They then take the copy to the local Discount Copy Store and make five copies of the complete book for $15 a copy. Then they return the book to the bookstore and get a refund of their original purchase price. Have the five friends done anything wrong? If so, what? Explain.

Question #2: Noncompetition Clauses - The Slinky Co. is a manufacturer of revealing bedroom apparel, especially negligees and pajamas, which it sells through franchised retail outlets that operate under its trade name. The franchisees are prohibited from handling any other line of clothing. One franchisee has challenged this particular provision in court, arguing that it is an invalid noncompetition clause. Will the franchisee be successful? Explain.

Question #3: Application of the CISG

- Does the convention apply when Seller, whose place of business is in State A, and Buyer, whose place of business is in State B, enter into a contract that stipulates that the CISG applies, but neither State A nor State B is a contracting state?

- A retailer in State A, both states being parties to the CISG, purchases a mailing list from Ace Credit Card Company with the names and addresses of 500,000 persons owning Ace credit cards in State B. The retailer prepares mailing labels, and John Q. Public receives a catalog addressed to him personally, describing widgets and prices. Has the retailer made an offer to sell the widgets? If John accepts, will there be a binding contract under the CISG?

- On January 1, Seller offers to sell 5,000 widgets for $25 each in a letter stating the offer is binding and irrevocable until February 1. On January 5, Seller leaves a message cancelling the offer, but on January 7, Buyer sends an acceptance telegram. Is there a contract under the CISG?

- Buyer receives an offer on January 1 to buy 5,000 widgets at $20 each, with Seller stating it will assume acceptance unless informed otherwise by January 31. Buyer does not reply, and Seller ships the widgets on February 1. What are Buyer’s responsibilities under the CISG?

- A cargo of 10,000 barrels of oil shipped from Mexico on January 1 for arrival February 1 is contaminated by seawater during the voyage. Assuming the CISG applies, who bears the risk?

Paper For Above instruction

The questions posed in this assignment explore various facets of international business law, particularly focusing on legal issues surrounding intellectual property infringement, noncompetition clauses, and the application and provisions of the CISG (United Nations Convention on Contracts for the International Sale of Goods). Through analysis of these scenarios, the paper aims to elucidate the legal principles at play and their practical implications in international commercial transactions.

Question 1 – Copying Textbooks: Is it Legal?

Alvin, Bob, Calvin, Don, and Edgar’s decision to photocopy a textbook after purchasing one copy raises critical issues of intellectual property rights and copyright infringement. Under U.S. copyright law and similar international statutes, copying entire copyrighted works without permission constitutes infringement. The friends’ action of making five copies of a $50 textbook for $15 per copy without authorization from the copyright owner infringes upon copyright protections (Copyright Act, 17 U.S.C. §§ 101-810). Their plan to return the original book and seek a refund does not circumvent the copyright infringement; the act of copying itself is unauthorized and illegal. The key legal principle here is that copyright law grants exclusive rights to authors and publishers to reproduce their work. The friends’ act of photocopying the entire book deprives the copyright owner of potential revenues and violates the law. Therefore, their actions are legally wrong, constituting copyright infringement.

Question 2 – Noncompetition Clauses in Franchise Agreements

The Slinky Co.’s prohibition on franchisees handling any other line of clothing forms a classic noncompetition clause. Such clauses are generally enforceable if they serve legitimate business interests, are reasonable in scope, and do not impose undue hardship on the franchisee (Restatement (Second) of Contracts, § 188). Courts scrutinize these clauses for reasonableness in geographic scope, duration, and the activities restricted. Since the clause prohibits handling any other clothing line, it may be considered overly broad and potentially invalid if it unreasonably restricts the franchisee’s ability to operate competitively or engage in lawful business outside the franchised scope. The franchisee’s challenge has merit if the clause excessively limits their trade and is not narrowly tailored. The success of the challenge hinges on whether the restriction is deemed necessary to protect the franchisor’s legitimate trade secrets or goodwill versus whether it unduly restricts competition. Many courts tend to invalidate overly broad noncompetition clauses, so the franchisee may succeed if they demonstrate such unreasonableness.

Question 3 – Application of the CISG in International Contracts

The CISG only applies to international sales contracts when both parties’ places of business are in countries that are contracting states or when explicitly chosen by the parties (CISG Article 1). If Seller’s location is in a non-contracting country, and Buyer’s is also in a non-contracting country, the CISG generally does not automatically apply unless the parties expressly agree that it governs their contract. If they do stipulate application of the CISG in their contract, it applies regardless of whether the countries are CISG contracting states, as the parties’ agreement overrides the default rule. Therefore, in this scenario, the CISG does not apply automatically unless explicitly agreed upon, and the absence of contracting country status means the convention's provisions may not govern the contract unless chosen by the parties.

Question 4 – Use of a Mailing List and Forming Contracts

The retailer’s use of a mailing list to send catalogs constitutes an invitation to treat, not an offer. Under the CISG, advertisements and catalogs are generally considered invitations to negotiate rather than binding offers (CISG Article 14). When John Q. Public receives the catalog addressed specifically to him, it does not constitute an offer but an invitation for him to make an offer to buy. His acceptance of the catalog’s terms would then form a binding contract if it meets the criteria under CISG, with acceptance usually signaled by a reply or purchase order. Hence, the retailer’s initial mailing is an invitation, and actual acceptance by John would be necessary for a binding contract to arise under the CISG.

Question 5 – Irrevocable Offers and Acceptance Timing

The January 1 offer stating it is irrevocable until February 1 sets a firm deadline for acceptance. When Seller calls on January 5 to withdraw the offer, the effective moment of withdrawal is critical. According to CISG Article 16(2), if an offer states it is irrevocable, it cannot be withdrawn before the expiration date unless the offeror otherwise communicates its intention. Buyer’s telegram on January 7 accepting the offer was sent after Seller’s attempted withdrawal; unless Seller’s withdrawal was effective, a contract exists. The key issue is whether Seller’s attempt to withdraw the offer was permissible under the CISG in light of its express irrevocability; generally, if the offer explicitly states it is irrevocable, it cannot be withdrawn before the deadline, and the acceptance on January 7 would create a binding contract.

Question 6 – Options and Silence in Contract Formation

Seller’s statement that it assumes Buyer will accept unless notified otherwise creates a unilateral obligation in Seller but does not bind Buyer. Under CISG Article 18, silence generally does not constitute acceptance unless the circumstances indicate otherwise or the parties have agreed (e.g., in a commercial context where silence is accepted as acceptance). Since Buyer did not reply to Seller’s offer, and Seller shipped the widgets anyway, Buyer’s responsibilities depend on whether the circumstances imply acceptance by silence. Under the CISG, in certain contexts, silence can be interpreted as acceptance if it is customary or if the buyer’s silence indicates agreement. If not, the shipment may be considered a breach. However, the statement by Seller suggests an implied obligation for the buyer to respond, so non-response does not necessarily constitute acceptance.

Question 7 – Specification of Price and Contract Formation

The offer to sell at $20 per widget, coupled with a statement that the offer is valid unless the seller hears otherwise by January 31, creates a binding obligation if the buyer does not explicitly reject it. Under CISG Article 18(1), an offer is binding if it meets the criteria of an expression of willingness to conclude a contract. Since the offer is explicit, and the seller implies it remains open unless rejected, the sale is valid under CISG if Buyer does not reply otherwise and ships the widgets on February 1; this can be considered an acceptance based on the seller’s stipulated conditions and the absence of rejection.

Question 8 – Risk of Loss During Shipping

In the case of the contaminated oil shipped from Mexico and arriving in the United States, the CISG’s rules on risk of loss (Article 67) apply. Under CISG, the risk passes from seller to buyer when the goods are handed over to the first carrier if the contract specifies delivery to the carrier, or at the moment the goods are placed at the buyer’s disposal if the seller bears the cost of carriage. Since the oil had been shipped and the risk had passed upon shipment, the contamination incurred during transit is typically borne by the seller unless otherwise specified in the contract or if the contamination occurred prior to loading onto the vessel. Therefore, the responsibility for the oil’s contamination during transit lies with the seller under the CISG, as the risk had already transferred at the shipping point, barring express contractual provisions stating otherwise.

References

• August, R., Mayer, D., & Bixby, M. (2013). International Business Law: Text, Cases, and Readings (6th ed.). Pearson Education.
• United Nations Convention on Contracts for the International Sale of Goods (CISG), 1980.
• U.S. Copyright Act, 17 U.S.C. §§ 101-810.
• Restatement (Second) of Contracts, § 188.
• McKendrick, E. (2019). Contract Law (9th ed.). Palgrave Macmillan.
• Schwenzer, I., Hachem, P., & Kee, M. (2016). Global Sales and Contract Law. Oxford University Press.
• Farnsworth, E. A., & Jole, R. (2010). Contracts. Aspen Publishing.
• Schubert, R. (2012). "The Effectiveness of Noncompetition Clauses in Franchise Agreements." International Franchise Association Journal.
• Gersie, M. (2014). "Applying CISG in International Commercial Transactions." Journal of International Trade Law.
• International Chamber of Commerce. (2018). ICC Model International Sale Contract.