LLM Master of Laws MCQ 4 — Questions and Answers
Question 1: In public international law, the principle of 'sovereign immunity' in its restrictive form means:
- States enjoy absolute immunity for all their activities
- States are immune for governmental acts (jure imperii) but not commercial acts (jure gestionis) (Correct answer)
- International organizations are immune but private companies are not
- Heads of state retain immunity even after leaving office
Correct answer: States are immune for governmental acts (jure imperii) but not commercial acts (jure gestionis)
The restrictive theory of sovereign immunity distinguishes between governmental acts (immune) and commercial acts (not immune).
Question 2: Under US antitrust law, a 'per se' rule applies to conduct that is:
- Always legal because it promotes efficiency
- Subject to a full rule-of-reason analysis balancing pro- and anticompetitive effects
- So inherently anticompetitive that it is conclusively presumed illegal without further analysis (Correct answer)
- Regulated under the FTC Act rather than the Sherman Act
Correct answer: So inherently anticompetitive that it is conclusively presumed illegal without further analysis
Per se rules apply to categories of conduct (like horizontal price-fixing) where the anticompetitive harm is so clear that no case-by-case analysis is needed.
Question 3: The 'business judgment rule' in US corporate law protects directors when they:
- Act in bad faith to benefit a controlling shareholder
- Make informed decisions in good faith they reasonably believe are in the company's best interest (Correct answer)
- Approve transactions in which they have an undisclosed personal interest
- Fail to implement any system for monitoring corporate compliance
Correct answer: Make informed decisions in good faith they reasonably believe are in the company's best interest
The business judgment rule creates a presumption that directors acted on an informed basis, in good faith, and in the honest belief that the action was in the company's best interests.
Question 4: Under TRIPS Agreement Article 27, patent protection must be available for inventions that are:
- Only biological processes and software algorithms
- New, involve an inventive step, and are capable of industrial application, in all fields of technology (Correct answer)
- Disclosed to the public domain within 20 years of filing
- Registered in at least three WTO member states simultaneously
Correct answer: New, involve an inventive step, and are capable of industrial application, in all fields of technology
TRIPS Article 27 requires patents to be available for inventions meeting the criteria of novelty, inventive step (non-obviousness), and industrial applicability in all technology fields.
Question 5: In US bankruptcy law under Chapter 11, the 'absolute priority rule' provides that:
- Secured creditors are paid before the bankruptcy petition is filed
- Junior creditors and equity holders cannot receive value unless senior creditors are paid in full (Correct answer)
- Priority creditors must be paid in full before the plan is confirmed
- Employees have absolute priority over all other unsecured creditors
Correct answer: Junior creditors and equity holders cannot receive value unless senior creditors are paid in full
The absolute priority rule requires that a reorganization plan must pay each class of creditors in full before junior classes receive anything.
Question 6: A 'change of control' provision in a US merger agreement typically gives the target company's counterparty the right to:
- Participate in the acquirer's post-merger board elections
- Terminate or renegotiate contracts upon a change in ownership or management (Correct answer)
- Claim a share of the acquisition premium paid to shareholders
- Convert their equity interests into acquirer shares automatically
Correct answer: Terminate or renegotiate contracts upon a change in ownership or management
Change of control provisions protect contract counterparties by allowing them to terminate or modify agreements when ownership of a party materially changes.
Question 7: In US constitutional law, the dormant Commerce Clause doctrine prevents states from enacting laws that:
- Regulate purely intrastate commerce without federal authorization
- Discriminate against or unduly burden interstate commerce (Correct answer)
- Impose taxes on federally chartered entities
- Restrict state employees from engaging in private business
Correct answer: Discriminate against or unduly burden interstate commerce
The dormant Commerce Clause (implied from Article I, §8) prohibits states from discriminating against or unduly burdening interstate commerce.
LLM Master of Laws MCQ 4
In public international law, the principle of 'sovereign immunity' in its restrictive form means: