This is a three-hour (180 minutes) examination. Any LL.M. student whose native language is not English is entitled to an extra hour for a total of four hours (240 minutes).

Answer both Part I and Part II of the examination. When calculating the final grade we will give the two parts different weights, 33 1/3% and 66 2/3% respectively. You should allocate your time accordingly.

This is an open book examination. During the examination you may consult any written materials except materials checked out from Underwood Law Library. Notwithstanding this latter limitation, you may consult xeroxed copies of library materials.

Read each question carefully. Follow directions. Think before you write. If you find an ambiguity that affects your answer to a question, make reasonable assumptions and state these clearly in your answer. Be concise. Be clear.

When you turn in your blue books, please enclose this examination paper with your examination number filled in on the upper right hand corner of this page.

Part I consists of three questions. We suggest that you spend approximately 20 minutes on each question (or 26 minutes if you are a non-native English speaking LL.M. student). Your grade on Part I will be weighed as one-third (33 1/3%) of the final grade.

What is the difference between a commercial letter of credit and a standby letter of credit? Who are the principal parties in a letter of credit transaction? What role does a "confirming bank" play?

Compare a countervailing duty proceeding with an anti-dumping proceeding. What U.S. Government agencies are involved in each proceeding and what function do they serve?

What law applies to the enforcement of a foreign judgment in the United States? In general, what defenses are available to a U.S. defendant to prevent enforcement of such a judgment?

Part II consists of a statement of facts followed by a series of questions grouped in three clusters. Your grade on Part II will be weighed two-thirds (66 2/3%) of your final grade. The grade will be calculated on the overall quality of your answers to the questions rather than one-third for each cluster of questions. We suggest that you spend approximately two hours on this part (or two hours and 40 minutes if you are a non-native English speaking LL.M. student).

William Yu, a U.S. citizen whose ancestors emigrated from China to the United States in the 19th century, lives in Los Angeles, California, where he owns an import-export firm. Much of the firm's business is with countries along the Pacific Rim.

Yu has recently been approached by Yanesh Ghote, a businessman who owns a small manufacturing business on the [fictitious] island of Tamorok in the Southern Pacific. Mr. Ghote, who has an engineering degree from an Indian university, has recently learned about electronic widgets, a device that is in great demand in the United States. Assembly of the widgets require two principal elements: a silicon chip imprinted with a proprietary electronic circuit, and skilled labor for the assembly of components. Mr. Ghote proposes to Yu that if Yu could obtain and send to him the silicon chips he, Ghote, would assemble completed widgets for export to the United States through Yu's import-export firm. Mr. Ghote also says that he is open to the possibility of a joint venture for this project.

After investigation of this possible opportunity, Yu discovers the following facts:

1. Ghote is an established businessman with a good credit record. Although his family has been engaged in import-export trade since it emigrated to Tamorok in 1906, Ghote has concentrated on manufacturing. He established his manufacturing enterprise in 1972. The enterprise has concentrated on the production of good quality small tools. These tools require precision engineering and careful assembly. Virtually all these tools have been exported to France and European Common Market countries, although some have been exported to Canada during the last five years. The enterprise has not exported any of its tools directly to the United States. Nor has the enterprise manufactured widgets before.

2. Tamorok is a former French colony that became independent in 1968. It has inherited French civil and commercial law. The government has not amended this private law.

3. Until recently, the Tamorok government has been stable. The political party that has been continuously in power since independence is drawn from the population that immigrated to Tamorok during the last century. A majority of these immigrants came originally from India. Leaders of the "native" population (i.e., the peoples that inhabited the island at the time of French colonization in the mid-19th century) have formed an opposition political party. During the last two years there has been racial unrest. If the opposition party comes into power its leaders promise to ensure that business opportunities will be offered first to native entrepreneurs. Some leaders also suggest that existing non-native business enterprises may be required to hire native employees and to include native "partners" on the boards of directors of companies.

4. Tamorok is a party to the General Agreement on Tariffs and Trade.

5. Tamorok is not a party to the United Nations Convention on Contracts for the International Sale of Goods.

6. Yu may obtain the silicon chips for widgets on the open market in the United States. The manufacturer of the chips has a U.S. patent (but not a Tamorok patent) for the chip. The U.S. patent has 11 years remaining. Yu does not know if the chip, which can be used in sophisticated computers, is subject to any export restrictions.

7. The purchase price for the silicon chips is $50 each. It will cost $3 to send the chips to Tamorok. Ghote proposes to sell the assembled widget for $100 C.I.F. Los Angeles. Yu thinks he can sell the widgets in the United States for between $110 and $120 each. [All dollars are U.S. dollars.]

8. Before entering into some form of relationship with Ghote, Yu asks you for advice on the following questions.

If Yu decides to supply chips to Ghote and to buy the electronic widgets manufactured by Ghote will the sales contract be governed by the United Nations Convention on Contracts for the International Sale of Goods?

If the Convention does not apply by its own force, will it be applicable if the following contract term is included in the final contract document?

"The rights and obligations of the parties under this agreement shall be governed by the United Nations Convention on Contracts for the International Sale of Goods notwithstanding that the rules of private international law (choice-of-law rules) might otherwise lead to the application of some other law."

If this clause is effective, would you advise Yu to accept this clause?

If he decides to proceed with the Ghote proposal, what steps will Yu have to take to ensure (1) that he can export the silicon chips from the United States, and (2) that he can import the assembled widgets into the United States for the lowest possible duty?

Assume Yu decides to accept Ghote's proposal that they establish a joint venture for the manufacture and export of these electronic widgets. Advise Yu on three important terms or clauses that Yu should include in the joint venture agreement with Ghote in order to protect Yu's interests.