1. Discount Records bought phonograph records from an exporter. Payment was by letter of credit issued by Barclays Bank. The exporter delivered a mix of cassettes, eight-track cartridges and other non - contractual goods. Discount Records tried to get an injunction to stop Barclays from paying under the letter of credit. What you think the court would do in this case?
A. The court refused
B. The court accepted
C. The court would not involve
D. The exporter will be paid - although later action in the courts may oblige him to make good any damage he caused the buyer x
2. In contracts, ...... is not normally allowed
A. Delegation of duties x
B. Assignment of rights
C. Performance of obligations
D. Fulfillment of duties
3. Which of the following is NOT the method of issuing the letter of credit
A. By email x
B. By airmail
C. By mail
D. By teletransmission
4. "A machine that consumes more fuel than specifications" is an example of
A. Latent defect x
B. Patent defect
C. Inherent defect
D. Apparent defect
5. Which of the following discrepancies is not the problem with the Letter of Credit?
A. The shipment was short
B. The shipment was late
C. There is no endorsement if endorsement is necessaryx
D. The credit has expired
6. The parties to a contract are not always required to... the Vienna Sales Convention
A. Ignore
B. Apply x
C. Refuse
D. Decline
7. Defects may be which of the following?
A. Defects in materials
B. Defects in workmanship
C. Both x
D. None of these
8. The lump-sum compensation is set about right
A. Liquidated damages. x
B. quasi indemnity
C. penalty
9. Which of the following statement is TRUE
A. The amount of the credit should be expressed clearly in figures
B. The amount of the credit should be expressed clearly in words to prevent misunderstanding.
C. The amount of the credit should be expressed both in figures and in words. x
D. It is obligatory to use the ISO currency code in stating the amount of the credit.
10. Which type of bill of lading is negotiable
A. surrender
B. straight
C. to order x
11. Which of these counts as a defect
A. wrong design x
B. Fair wear and tear
C. Misuse
D. Missing items
12. The Vienna Sales Convention is also called
A. The Uniform Law of International Sale
B. The Uniform Law on the Formation of Contracts for the International Sale of Goods
C. The United Nations Convention on Contracts for the Interntional Sale of Goods x
D. The United Nations Convention on Contracts for acceptance
13. Earthquake, volcanic eruption and lighting are covered under the cargo clause
A. A
B. B
C. C
D. A and B x
14. If a dispute arises, the recital allows the court to discover the real meaning of...
A. the contract x
B. the term
C. the incoterm
D. the appendix
15. In order to produce perfect products, manufacturers need to have.......
A. product insurance
B. quality assurance programs x
C. customer satisfaction
D. defect liability period
16. Transfer of risk from the seller to the buyer ( Incoterm 2000): DEQ
A. When the goods are ex-quay x
B. When the goods are handed to the first carrier
C. When the goods across the ship's rail
D. When the goods are on board
17. To make sure that the officer signing the contract has authority to sign the contract, parties should check...
A. The duplicate of the signature
B. The authenticity of the signature x
C. The coverage of the signature
D. The transferability of the signature
18. In negotiating a letter of credit, the step in which the exporter rigorously checks documentation and submits it to the bank is.....
A. Agreement
B. Verification
C. Specification
D. Compliance x
19. Feeble-minded people lack.... to enter contracts
A. money
B. time
C. contractual capacity x
D. intelligence
20. Of the three options available for setting disputes, litigation before the court is internationally least attractive as it is...
A. Expensive and legalistic x
B. Business - like and flexible
C. Time-saving and private
D. Fast and acceptable
21. Elderly people are... to deal with a contract
A. Unable
B. Able x
C. Impossible
D. Unaffordable
22. A grace period sometimes used to...
A. avoid penalty
B. facilitate early delivery x
C. avoid liquidated damages
23. Inspection by... reveals discrepancies in quality
A. customs officers
B. the carrier
C. the exporter
D. the importer x
24. IN a contract, the word "whereas" means....
A. "only that"
B. "while"
C. "when"
D. "because" or " considering that" x
25. Disclaimer of warranty often accompanies
A. Contracts for hardware
B. Contracts for footwear
C. Contracts for glassware
D. Contracts for software x
26. What does prompt payment of the letter of credit depend on?
A. It depends on the presentation of correct documentation of the exporter x
B. It depends on the kinds of documents which must be presented by the exporter
C. It depends on the willingness of the buyer
D. It depends on the time of checking the documents from both advising bank and issuing bank
27. When the exporter fills in the letter of credit application form, if the box "requested" for the " Confirmation of credit to the beneficiary" is ticked, what does it means?
A. It means the exporter wants the bank in his country merely handle the paperwork
B. It means the exporter wants the bank in his country make the payment itself and recover the funds from the buyer's bank x
C. It means the exporter is double guaranteed in terms of payment by a third bank beside the issuing bank and the advising bank
D. It means the confirmation from the issuing bank in terms of payment in case the buyer defaults.
28. In settlement by sign payment.....
A. The seller presents the necessary documents to the issuing bank.
B. The seller presents the necessary documents to the advising bank
C. The seller presents the necessary documents to the paying bank x
D. The seller presents the necessary documents to the reconfirming bank
29. The essence of Continental Law is....
A. Codification
B. Verification
C. Authentication
D. Ratification
30. The workforce at the factory go on strike
A. Yes
B. Questionable x
C. No
31. In CIF and CIP contracts, ...... must pay for insurance from the point of delivery to the named point of arrival
A. The exporter x
B. The importer
C. The carrier
32. In how many originals and copies is the air waybill issued according to the standard of the International Air Transport Association IATA?
B. Three originals and six copies
C. Three originals and nine copies
D. It depends on the requirements in the letter of credit
33. Once the bank has indicated the discrepancies, what can the exporter do?
A. The exporter can provide the missing paperwork or correct errors
B. The exporter can ask the buyer to instruct bank to change the terms of the letter of credit
C. The exporter can ask the bank to process the letter of credit with the discrepancies but to pay only when (and if) the issuing bank permits payment
D. any of the above x
34. Which of the following is NOT considered to be special requirement in a sale/purchase contract?
A. Containers are required to be fumigated before shipment
B. Upgraded packaging materials
C. Goods must be packed according to export standardsx
D. Health inspection for foodstuffs
35. Which of the following method of payment is NOT possible
A. 100% of the contract price by letter of credit
B. 20% prepayment and 80% by letter of credit
C. 90% by letter of credit and 10% retaining until the warranty period is over
D. Part of the contract price is paid by letter of credit but there is not a clear figure stated in the amount of the credit.x
36. Failure to meet specifications is a:
A. Defect in workmanship
B. Defect in material
C. Defect in design x
D. Defect in quantity
37. In principle the buyer can reject delivered goods if they do not conform to the contract. This is called...
A. Implied warranty of suitability
B. Implied warranty of conformity x
C. Implied warranty of mechantability
D. Implied warranty of fitness for intended purpose
38. If the price is quoted FAS Osaka, who pays for the freight?
A. The shipper
B. The exporter
C. The forwarding agent
D. The buyer x
39. When the Bill of lading marked "freight prepaid”. Who pays for the freight?
A The Buyer
C. The agent
D. It depends on the agreement.
40. In contract negotiation, " an invitation to provide terms and condition" may mean.....
A. Another name for acceptance
B. Another name for an offer
C. An invitation to the other party to make an offer x
D. An invitation to the other party to accept an offer
41. Defects include:
A. mistake
B. misuse
C. fair wear and tear
D. workmanship x
42. A bank guarantee which gives the exporter an acceptable level of security in terms of payment shall be paid by...
A. The buyer x
B. The exporter
C. A bank
D. A third party
43. A marine bill of lading becomes negotiable document and no restriction on ownership when it is....
A. to order, blank endorsed x
B. surrendered, blank endorsement x
44. "Door to door service" is offered. Which term should be used?
A. DDP x
B. CIP
C. CIF
45. With a well-designed set of specifications, the seller can protect its....
A. reputation x
B. production
C. resolution
D. profitability
46. The best solution for the exporter to make late payment impossible is....
A. A typical contract clause in which there are regulations on the amount of interest the seller shall be entitled to receive in case of late payment
B. An agreement with the buyer to strengthen the payment provisions with a payment guarantee
C. An agreement with an insurance company in case the buyer fails to pay on time
D. A confirmed, irrevocable, at sight letter or credit. x
47. A contract requiring the exporter to send the contract goods by road from Keyna to Zambia with freight paid by the exporter
A. CFR Lusaka
B. CPT Lusaka x
C. CFR Nairobi
48. It is common to put the definition clause..... of the contract
A. at the beginning
B. near the beginning x
C. at the end
D. near the end
49. Why letters of credit are formally called "documentary credits"?
A. Because a letter of credit is a binding agreement by a bank to pay a certain sum of money when the exporter presents the necessary documents to the bank.
B. Because the letter of credit is issued by an issuing bank at the request of the buyer.
C. Because in a letter of credit situation, documents are exchanged for money x
D. Because the documents in a letter of credit are proofs of trust.
50. The things that the exporter should keep in mind in negotiating payment are....
A. Payment method, timing, place, delay and results of delay x
B. How payment will be made and the date of payment
C. Where the money must be before payments is considered complete and what delay in payment is excusable
D. Results of non-excusable delay in payment and time of payment
Đề 18
Câu 1:
If the price is quoted FOB Singapore, who pays for the insurance and freight?
A. The exporter.
B. The buyer.
C. The forwarding agent.
D. The confirming bank.
Cau 2
What happens first when a bank resuses to pay under a letter of credit?
A. The bank will cite a “discrepancy”, some aspect of the documemtation that is not in line with the terms of the credit.
B. A check - list of commonly cited discrepancies will be used by bank.
C. The exporter will have to re-submit their shipping documents.
D. The exporter must contact the buyer asking the buyer to instruct the issuing bank to extend the date of the credit.
Câu 3:
In negotiating a letter of credit, the step in which the exporter checks the credit to see that required documentation is as agreed is……….
A. Agreement.
B. Incorporation.
C. Verification.
D. Compliance.
Cau 4
Transfer of risk from the seller to the buyer (incoterm 2000): CFR
A. When the goods are At the seller’s premises.
B. When the goods are handed to the first carrier.
C. When the goods across the ship’s rail.
D. When the goods are on board.
Câu 5
Within the four alternatives of the at – sight Letter of credit, which one is the least satisfatory for the exporter?
A. Settlement by payment.
B. Settlement by deferred payment.
C. Settlement by acceplance.
D. Settlement by nogatiation.
Cau 6
Of the three options available for setting disputes, litigation before the court is internationnnally least attractive as it is……
A. Expensive and legalistic.
B. Business- like and flexible.
C. Time-saving and private.
D. Fast and acceptable.
Câu 7:
In settlement by deferred payment, if the seller needs money immediately, what can he do?
A. There is no way he can get money immediately.
B. He can exchange the letter of credit for cash with any agreeable bank.
C. The seller can realize some part of the letter of credit’s value, not its full value.
D. Payment is still safe but it is delayed.
Cau 8
According to the UCC, how long is the legal action period?
A. Two years.
B. Three years.
C. Four years.
D. one years.
Câu 9:
The ….. has no power to enforce his solution or to bind the parties, his task is to suggest a fiar solution only.
A. Judge.
B. Conciliator.
C. Magistrate.
D. Lawyer.
Cau 10
If the price is quoted CIF San Francisco, who pays for the in ssurance and freight?
A. The exporter.
B. The buyer.
C. The forwarding agent.
D. The confirming bank.
Cau 11
The risk of rough handing is not corvered under the cargo claus….
A. A
B. B
C. C
D. B and C
Cau 12
The question of warranty is disposive. This means:
A. It is fixed.
B. The exporter can usually exclude all warranties.
C. The exporter must include it in the contract.
D. It is non-exsitent.
Cau13
Which type of payment is the most advantageous for the exporter
A. Credit by sight payment.
B. Credit by deferred payment.
C. Credit by acceptance.
D. Credit by negotiation.
Cau 14
…….. can create no – contract situations
A. Only duress
B. Only fraud
C. Onlymistake
D. Duress, fraud and mistake all
Cau 15
A volcanic eruption burries the factory in ash
A. Yes
B. Questionable
C. No
Cau 16
Many export contaracts cannot come intoforce due to………
A. Certain preconditions are not met
B. Force majeure
C. Late delivery
Cau 17
Transfer of risk from the seller to the buyer (incoterm 2000): CIP
A. When the goods are At the seller’s premises.
B. When the goods are handed to the first carrier.
C. When the goods across the ship’s rail.
D. When the goods are on board.
Cau 18
Companies ….. to use the short from of the names in contracts
A. Are forced
B. Aer not forced
C. Are allowed
D. Are not allowed
Cau 19
A contract requiring an exporter in Mozambique to deliver the contract goods in Beira, Mozambique, for the shipment by sea to Dar es Salaam, Tanzania.
A. FAS Beira
B. CIF Beira
C. Fob Dar es Salaam
Cau 20
Continental Law copes with ……
A. Personal problems
B. International trade
C. National issues
D. Individual conflicts
Cau 21
IN contract, ……. Is not normally allowed
A. Delegation of duties
B. Assignment of rights
C. Performance of obligations
D. Fulfillment of duties
Cau 22
“A voltmeter that is specified as accurate within 1 millivolt is accurate within only 5 millivolt” is an example of.
A. Defective design
B. Difective maters
C. Defective workmanship
D. Misuse by the seller
Cau 23
If a dispute arises, the recital allows the court to discover the real meaning of ……..
A. The contract
B. The term
C. The incoterm
D. The appendix
Cau 24
In settlement by sight payment ………..
A. The seller presents the necessary document to the issuing bank
B. The seller presents the necessary document to the advising bank
C. The seller presents the necessary document to the paying bank
D. The seller presents the necessary document to the reconfirming bank
Cau 25
If the price is quoted FAS Osaka, who pays for the freight
A. The shipper
B. The exporter
C. The forwarding agent
D. The buyer
Câu 26:
The point at which money is deaamed to be paid most preffered by the seller….
A. When the buyer pays the money into his bank
B. When the buyer’s bank transfers funds
C. When the buyer’s instructs the bank to pay
D. When the funds reach the seller’s bank account
27: In negotiating a letter of credit , the step in the buyer applies for the letter of credit specifying the agreed documentatiom…….
A.Incorporation
B. Vertication
C. Compliance
D. Non of the above
Câu 28:
The seller shall make good the defect of damage as soon as practicable and at his own cost”. This is an example
A. Legal action period
B. Notification period
C. Rectification period
D. Defect liability period
Câu 29: W hen the exporter fill in the letter of credit application form , if the box requestef for the Confirmation of credit to the beneficiary is ticked, what does it mean ?
A. Its mean the exporter wants the bank in his country merely handle the paperwork
B. Its mean the exporter wants the bank in his country make the payment itself and recover the funds from the buyer’s bank
C. Its mean the exporter double quaranteed in term of payment by the third bank beside the issuing bank and the advising bank
D. Its mean the confirmation from the issuing bank interms of payment in case the buyer defauts
Câu 30:
A term or terms in a contract could raise the contract price
A. A shorter warranty period
B. Customer orders goods in one color
C. No additional packaging or safety warning are required beyond normal standards
D. A longer warranty period
Câu 31. Who usually has to pay for curing defects?
A. The buyer
B. The seller
C. Both the buyer and the seller
D. The manufacturer
Câu 32. Which of the following examples is a talent defect?
A. Missing parts
B. Structural weakness
C. Wrong items
D. Broken items
Câu 33. A contract that is ultra vires is……
A. Well Enforceable
B. Unenforceable
C. Valid
D. Effective
Câu 34. The main difference between Continental andAnglo- American contract law is the degree of ……
A. Codification
B. Formation
C. Automation
D. Interpretation
Câu 35. The final quality hurdle is the …..during which the exporter is liable to cure defects that come to light in the goods.
A. Guarantee period
B. Deffect liability period
C. Correction methods
D. Quality assurance requirement
Câu 36: A letter of credit either “ revocable” and “irrevocable” letter of credit, so the plain expression “ letter of credit generally mean the irrevocable kind. The word “ irrevocable”, therefore. Should not always appear in the text of the credit and of the contract. Right or wrong?
A. Wrong
B. Wrong, because it should always appear in the text of the credit and the contract according tothe ICC’s rules
C. Right
D. Right, because in the absence of a clear indication, letter of credit are deemded to be irrevocable
Câu 37. The word “ cash” in international trade means……..
A. Coins and notes
B. Gold
C. Checks or bank transfers
D. Prepayment
Câu 38. Whck of these does not require prior inspection by SGS?
A. The philippiness
B. Indonesia
C. The United Kingdom
D. All A, B, C
Câu 39. A lockout Background the worker have been striking for one day a week . the managerment locks the workers out of factory until they agree to end the strike
A. Yes
B. Questionable
C. No
Câu 40. General average has the condition…….
A. The ship was in danger
B. The caption decided to lighten the ship and the ship arrived the destination safety
C. The caption decided to lighten the ship and the ship arrived the destination safety with the remaining cargo
D. A & C
Câu 41. Transfer of risk from the seller to the buyer ( Incoterm 2000). FOB
A. When the goods are at the seller premises
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the goods are on board
Câu 42. In negotiating specification, conflict can arise
A. Within the importer’s own team
B. Between the importer and the exporter
C. Between the exporter’s own team
D. All of the above
Câu 43: Continental law is widely used for………
A. International issues
B. National issues
C. Both International issues and National issues
D. Neither International issues and National issues
Câu 44. Another name for Tender Guarantee is……
A. Revocable guarantee
B. Bid Guarantee
C. Bond guarantee
D. Bid bond
Câu 45. A promise by the exporter to cure defects in his product is called:
A. A product guarantee
B. Product warranty
C. A product insurance
D. A product certification
Câu 46. The name of parties to contract are often on …. of the contract
A. The first page
B. The second page
C. The last page
D. All pages
Câu 47. The first step in negotiating a letter of credit is……
A. Incorporation
B. Specification
C. Agreement
D. Vertification
Câu 48. The contract requiring an exporter in Ethiopia to send the contract goods by air for delivery in Windhoek, namibia
A. CIF Winhoek
B. CIP Winhoek
C. DEQ Winhoek
Caau49. In contract “ partial invalidity provision” means the invalidity of one part of the contract…….
A. May invalidate the rest
B. Does not invalidate the rest
C. Affects the rest
D. Enforce the rest
Câu 50. What does prompt payment of lettet of credit depend on ?
A. Its depend on the presentation of correct documentation of the exporter
B. Its depend on the kind of documents which must be presented by the exporter
C. Its depend on the willingness of the buyer
D. Its depend on the time of checking the document from both advising bank and issuing bank
ĐỀ 19
1. What happens if the issuing bank finds a problem with the documents and refuses to send funds to the advising bank to cover payment?
A. The advising bank has to suffer that loss due to their carelessness in checking the shipping documents
B. The advising bank gets its money back from the exporter
C. The payments from the advising bank to the exporter are always made with resource. The exporter has to pay back the advising bank in such a case. x
D. It is the responsibility of the issuing bank of paying back the advising bank in such a case
2. With a well-designed set of specifications, the seller can protect its… and avoid costs
A. Reputation x
B. Production
C. Resolution
D. profitability
3. The cheapest mode of transport:
A. By sea x
B. by air
C. by road
4. What is transferable credit ?
A. It is the kind of credit which allows the exporter to transfer his right as the credit’s beneficiary to any third party
B. It is the kind of credit which allows the first beneficiary to request the confirming bank to pay a third party x
C. It is the kind of negotiable document with which the exporter can endorse for any third party
D. It is the kind of credit with which the buyer will not necessarily know who is the actual supplier of the goods
5. As the consequences of a defect can be expensive, the question of who pays for the consequential loss or damage is often..
A. Agreeable
B. Controversial x
C. Non-negotiable
D. Amicable
6. There are … parties to a warranty and… in a guarantee
A. Three/two
B. Three/three
C. Two/three x
D. Two/two
7. How many types of implied warranties are there ?
A. Two
B. Three x
C. Four
D. five
8. What do export insurance premiums depend on:
A. Type of goods exported
B. Creditworthiness of the buyer
C. The political stability of the buyer’s country
D. All of the above x
9. A contract comes into force when an offer is made by one side and … by the other
A. Accepted x
B. Declined
C. Written
D. Drawn
10. The place of delivery is doubly important to the exporter because the date of… normally depends on time and place of delivery
A. Insurance
B. Payment x
C. invoice
11. The mechanism of a confirmed letter of credit works as follow:
A. Buyer instructs issuing bank to issue letter of credit in favor of the seller
B. Buyer instructs issuing bank to instruct advising bank to pay under the letter of credit in favor of the seller
C. Buyer instructs an issuing bank to instruct a confirming bank to pay under a letter of credit in favor of the seller x
D. Buyer instructs issuing bank to instruct any third bank to pay under the letter of credit in favor of the seller
12. Many export contracts cannot come into force due to :
A. Certain preconditions are not met x
B. Force majeure
C. Late delivery
13. Why do few exporters ask for bank guarantees as security for payment
A. Because they are not expensive to set up
B. Because they run into trouble so often x
C. Because they are conditional guarantees
D. Because the letter of credit is much preferred
14. As for Anglo-American law, the decision of the judge is always..
A. Predictable
B. Foreseeable
C. Unpredictable x
D. Estimated
15. Among a number of international bodies offering arbitration services, the… in Paris is the most prestigious
A. UCP
B. ADR
C. ICC x
D. FAO
16. Defects such as wrong items, broken or missing parts, scratches, and so on are called…
A. Patent defects x
B. Latent defects
C. Inherent defects
D. Concealed defects
17. A commercial invoice must be made out to..
A. The exporter
B. The shipper
C. Any party endorsing the bill of lading
D. The applicant for the letter of credit, normally to the buyer, unless otherwise stated in credit x
18. The bank helping the exporter to check the correctness of the documents and set the payment procedure in motion is
A. The issuing bank
B. The advising bank x
C. Confirming bank
D. Any third bank
19. In a contract under a Continental law, recital
A. Is essential
B. Is not useful
C. Is not essential x
D. Is important
20. “ Full set on board ocean bills of lading to order shipper, blank endorsed”. In this clause shipper means
A. Exporter
B. Importer
C. bank
D. A or B or C. it depends on situation x
21. As soon as the exporter receives advice that the letter of credit has been opened, what should he do ?
A. He should check that it complies with the agreement he negotiated with the buyer x
B. He should check if there is any document that he does not understand
C. He should check if there is any requirement that he does not agree to
D. He should check if there is any necessary amendment to the terms of the letter of credit
22. “ A voltmeter that is specified as accurate within 1 millivolt is accurate within only 5 millivolt” is an example of
A. Defective design x
B. Defective materials
C. Defective workmanship
D. Misuse by the seller
23. The “ order of precedence” among the documents explains
A. The authority of the documents x
B. The meaning of the documents x
C. The value of the documents x
24. Why can a manufacturer sometimes accept a loss on an export deal
A. He wants to win a regular customer
B. His factory may be short of work
C. He can get some export incentives from the government
D. any of the above ( want to win a regular customer, his factory may be short of work, he can get some export incentives from the government ) x
25. Partial invalidity clause can help to avoid problems with contracts that..
A. might infringe government regulations x
B. violate the trade laws
C. discourage trade
D. Both B and C
26. Which of the following discrepancies is not the problem with the letter of credit ?
A. the credit has expired
B. documents required by the credit are missing
C. the credit amount is exceeded
D. insurance cover is expressed in a currency other than that of the credit x
27. Which is the most appropriate method of payment for the exporter in the following case ?
A contract for supply cloth worth $5,000 per month to the government Oceanea – a prosperous country. Duration of the contract is 2 years, but renewable. Contract represents 0.5% of turnover.
A. open account with no security
B. open account with bank guarantee
C. open account with export credit insurance
D. Export credit insurance is advisable . Selling on open account with no security at all is also possible. x
28. If the price is quoted CPT Vancouver, who pays for the freight ?
A. The exporter x
B. the forwarding agent
C. the buyer
D. the confirming bank
29. Beside the commercial invoice, the transport document and insurance document, what do “ Other documents” include ?
A. certificate of origin
B. Certificate of inspection
C. a health inspection
D. any of the above x
30. A ban is issued on the export of jute products by newly elected government that has been preparing legislation on this subject for five years
A. yes x
B. questionable
31. It’s always good for the exporter to promote his skills and the excellence of his products…
A. in the contract documents
B. in the payment clause
C. in the recital x
D. in the delivery clause
32. A ban is issued on the export of jute products by newly elected government
B. questionable x
C. no
33. When the bill of lading marked “ freight prepaid”. Who pays for the freight
A. the buyer
B. the seller x
C. the agent
D. it depends on the agreement
34. Anglo-American law is
A. law code
B. case law x
C. civil law
D. legal code
35. Which of the following examples is a latent defect ?
A. missing parts
B. structural weaknesses x
C. wrong items
D. broken items
36. The applicable law governs questions concerning the validity,…., performance of contract
A. interpretation x
B. payment
C. correction
D. Acceptance
37. In how many originals and copies is the air waybill issued according to the standard of the International Air Transport Association – IATA ?
A. three originals and three copies x
B. three originals and six copies x
C. three originals and nine copies x
38. Transer of risk from the seller to the buyer ( Incoterm 2000): CIF
A. when the goods are at the seller’s premises
B. when the goods are handed to the first carrier
C. when the goods across the ship’s rail x
D. when the goods are on board
39. Which is the most appropriate method of payment for the exporter in the following case ?
A new small customer in a Pacific island republic much given to political disturbances. The order is for $10,000 worth of assorted textiles
A. open account with no security
B. open account with bank guarantee
C. open account with export credit insurance
D.confirmed letter of credit x
40. The buyer can reject goods that are not of saleable quality. This is called
A. implied warranty of suitability
B. implied warranty of conformity
C. implied warranty of merchantability x
D. implied warranty of fitness for intended purpose
41. When parties agree to end a contract, ….occurs
A. termination
B. frustration
C. rescission x
D. suspension
42. Who issues ocean bill of lading ?
A. captain
B. exporter
C. shipping company x
D. agent
43. Under the public law, a company can only sign a contract
A. even when they lack powers
B. that is beyond its power
C. both A and B
D. that is within its power x
44. In a confirmed letter of credit, what happens if the bank pays the exporter and the issuing bank finds something wrong with the documents ?
A. the exporter has a problem
B. the confirming bank has a problem
C. it is the issuing bank which has an absolute obligation to pay the exporter according to the terms of the credit
D. the confirming bank has paid the money to the exporter and has no way of recovering it. The confirming bank must pay the exporter without recourse x
45. Which of the following is essential to successful business ?
A. quality
B. customer satisfaction x
C. correct making and packaging
D. on-time delivery
46. The things that the exporter should keep in mind in negotiating payment are
A. Payment mode, timing, place, delay and result of delayx
B. how payment will be made and the date of payment
C. where the money must be before payment is considered complete and what delay in payment is excusable
D. results of non-excusable delay in payment and time of payment
47. A marine bill of lading becomes negotiable document and no restriction on ownership when it is..
A. to order, blank endorsed x
B. surrendered, blank endorsement
C. to order, endorsed
48. Termination for default occurs when the contract names certain ….which allow one side to terminate
A. time limits
B. defaults x
C. situations
D. conditions
49. What can protect both the exporter and importer in an export contract ?
A. a well-designed set of specifications x
B. an itemized set of specifications
C. a plain set of specifications
D. none of these
50. The bill of lading issued by the carrier for air transport is called
A. air waybill x
B. air bill of lading
C. air way bill of lading
D. airway bill
ĐỀ 20
1. A contract comes into force when an offer is made by one side and…by the other
A. Accepted x
B. Declined
C. Written
D. drawn
2. When the exporter fills in the letter of credit application form, if the box “requested” for the “ Confirmation of credit to the beneficiary” is ticked, what does it mean ?
A. It means the exporter wants the bank in his country merely handle the paperwork
B. It means the exporter wants the bank in his country make the payment itself and recover the funds from the buyer’s bank x
C. It means the exporter is double guaranteed in terms of payment by a third bank beside the issuing bank and the advising bank
D. It means the confirmation from the issuing bank in terms of payment in case the buyer defaults
3. Within the four alternatives of the at-sight letter of credit, which one is the least satisfactory for the exporter ?
A. settlement by sight payment
B. settlement by deferred payment
C. settlement by acceptance
D. Settlement of negotiation x
4. The mechanism of a confirmed letter of credit works as follow:
A. Buyer instructs issuing bank to issue letter of credit in favor of the seller
B. Buyer instructs issuing bank to instruct advising bank to pay under the letter of credit in favor of the seller
C. Buyer instructs an issuing bank to instruct a confirming bank to pay under a letter of credit in favor of the seller x
D. Buyer instructs issuing bank to instruct any third bank to pay under the letter of credit in favor of the seller
5. In drafting an arbitration clause, the following questions must be resolved:
A. How many arbitrators sit in the court ?
B. What is the language of the court ?
C. Where is the place of the court ?
D. All of the above x
6. If alternative means of transport or partial shipments are allowed perhaps by different modes of transport, the letter of credit should have the words….between the names of transport documents
A. and
B. or
C. and/or x
D. either B or C
7. Which of the following examples is a patent defect ?
A. crushed or stained garments x
B. the flooring shows signs of deterioration
C. high fuel consumption
D. inadequately tightened nuts and bolts
8. The expiry date of the letter of credit is….
A. the date the exporter will be paid for the goods sold
B. the last date of presentation of documents to the bankx
C. the date the letter of credit is no longer effective
D. the last date the shipment should be made by the exporter
9. War risk is not included:
A. A clause
B. B clause
C. A, B, C clause x
10. In contract negotiation, “an invitation to provide terms and condition” may mean:
A. another name for acceptance
B. another name for an offer
C. An invitation to the other party to make an offer x
D. an invitation to the other party to accept an offer
11. Transfer of risk of the seller to the buyer (Incoterm 2000) DES
A. when the goods are ex-ship x
B. when the goods are handed to the first carrier
C. when the goods across the ship’s rail
D. when the goods are on board
12. The bank that the buyer asks to open a letter of credit is called:
A. the issuing bank x
B. the advising bank
C. the confirming bank
D. the opening bank
13. “ The seller shall make good the defect or damages as soon as practicable and at his own cost”. This is an example of:
A. legal action period
B. notification period
C. rectification period x
D. defect liability period
14. “ A radio lacks the wires connecting the loudspeaker to the amplifier” is an example of :
A. defective design
B. defective materials
C. defective workmanship x
D. misuse by the buyer
15. In negotiating a letter of credit, the step in which the list of all required documentation is incorporated into the contract is:
A. specification
B. incorporation x
C. Compliance
D. verification
16. If the price is quoted CFR HaiPhong, who pay for the freight ?
A. the buyer
B. the exporter x
C. the carrier
D. the forwarding agent
17. Who issues ocean bill of lading?
A. captain
B. exporter
C. shipping company x
D. agent
18. Why do few exporters ask for bank guarantees as security for payment ?
A. Because they are not expensive to set up
B. Because they run into trouble so often x
C. Because they are conditional guarantees
D. Because the letter of credit is much preferred
19. An offer dies if it has a/an …
A. acceptance
B. agreement
C. adoption
D. revocation x
20. The place of delivery ( CIP, CIF ) should not be confused with the…of the goods
A. departure
B. destination x
C. transshipment
21. When there are words like “about” or “approximately” in the letter of credit’s amount, how much can the actual payment be ?
A. the actual payment therefore can be 10% more or 10% less than the stated amount x
B. the actual payment therefore can be 15% more or 15% less than the stated amount
C. the actual payment therefore can be 5% more or 5% less than the stated amount
D. the actual payment therefore can be between 5 % and 10% of the stated amount
22. Drunken people have no…to sign contract
A. contractual capacity x
B. contractual concept
C. contractual government
D. contractual branch
23. As the consequences of a defect can be expensive, the question of who pays for the consequential loss or damage is often…
A. agreeable
B. controversial x
C. non-negotiable
D. amicable
24. How many timing problems are involved in Defect Liability Period ?
A. three
B. four x
C. two
D. five
25. In negotiating a letter of credit, the step in which the exporter checks the credit to see that required documentation is as agreed is:
A. agreement
B. incorporation
C. veritification x
D. compliance
26. What happens first when a bank refuses to pay under a letter of credit?
A. the bank will cite a “discrepancy”, some aspect of the documentation that is not in line with the terms of the creditx
B. a check-list of commonly cited discrepancies may be used by banks
C. the exporter will have to re-submit their shipping documents
D. the exporter must contact the buyer asking the buyer to instruct the issuing bank to extend the date of credit
27. The background of the contract is provided in the form of:
A. a clause
B. a definition
C. the annex
D. a whereas-recital x
28. The cheapest mode of transport is:
A. by sea
B. by air
C. by road
29. A contract that is ultra vires is:
A. well enforceable
B. unenforceable x
C. valid
D. effective
30. Which of these does not require prior inspection by SGS ?
A. the Philippines
B. the Indonesia
C. the United Kingdom x
D. all A,B and C
31. After making the shipment of the goods to the buyer, the exporter presents the shipping documents to…
A. the issuing bank
B. the advising bank x
C. confirming bank
D. opening bank
32. …..are the explanations
A. definition clauses
B. whereas-recital clauses x
C. preamble clauses
D. annex clauses
33. An FOB sales contract agrees that the exporter can deposit the goods in the warehouse if the ship arrives late and that this country is delivery. If the letter of credit requires a bill of lading and makes no mention of a warehouse receipt,
A. the exporter will still be paid against a warehouse receipt
B. the bank simply cannot pay against a warehouse receipt x
C. the buyer refuses to pay the exporter against a warehouse receipt
D. the buyer still has to pay the exporter against the warehouse receipt because his designated vessel has arrived late at the port of loading
34. ….refer to the questions of implied warranties
A. most contracts
B. most laws x
C. the UCC
D. the Vienna Sales Convention
35. There is no connection between the letter of credit and the sales contract. Right or wrong ?
A. completely right x
B. completely wrong
C. it depends
D. the exporter and the buyer may agree that all the terms in their sales contract must be stated in the letter of credit
36. A grace period is sometimes used to ….
A. avoid penalty
B. facilitate early delivery x
C. avoid liquidated damages
37. Continental law copes with…
A, personal problems
B. international trade
C. national issues x
D. individual conflicts
38. What does it mean by “ irrevocable” letter of credit ?
A. it means the letter of credit can be cancelled at any time by the buyer or issuing bank
B. it means the letter of credit cannot be cancelled at any time by the buyer or the issuing bank x
C. it means the lette of credit can be cancelled if the beneficiary agrees to do so
D. it meand the letter of credit can only be cancelled if the buyer agrees to do so
39. A ban is issued on the export of jute products by newly elected government
B. questionable x
C. no
40. If the price is quoted FOB Singapore, who pays for the insurance and freight ?
A. the exporter
B. the buyer x
C. the forwarding agent
D. the confirming bank
41. The disadvantages of…policy is that it is set up for particular time and automatically expires
A. tailor-made
B. floating x
C. open cover
42. Inspection by the buyer is called:
A. independent inspection
B. inspection of goods prior to shipment
C. open package inspection x
D. customs inspection
43. “ Nuts and bolts are inadequately tightened” represents:
A. defective materials
B. defective design
C. defective workmanship x
D. misuse
44. A contract requiring the exporter to send the contract goods by road from Kenya to Zambia with freight paid by the exporter:
A. CFR Lusaka
B. CPT Lusaka x
C. CFR Nairobi
45. Most contracts contain an assurance that the exporter will………..any defects in his products
A. make good x
B. take away
C. alter
D. modify
46. The delivery depends on..
A. date of execution
B. effective date x
C. preconditions
47. What do export insurance premiums depend on ?
A. type of goods exported
B. creditworthiness of the buyer
C. the political stability of the buyer’s country
D. all of above x
48. Among a number of international bodies offering arbitration services, the…in Paris is the most prestigious
A. UCP
B. ADR
C. ICC x
D. FAO
49. The names of…are normally the full, registered name of the Company
A. the exporter
B. the buyer
C. either the exporter or the buyer
D. the parties x
50. The parties to a contract are not always required to…. The Vienna Sales Convention
A. ignore
B. apply x
C. refuse
ĐỀ 21
1. Anglo- American law is also called:
A. Civil law
B. Legal code
C. Common law x
D. Law code
2. The first step in negotiating a letter of credit is:
A. Incorporation
B. Specification
C. Agreement x
D. Verification
3. A mistake about the goods in a contract means there no……..
A. Meeting of acceptance
B. Meeting of minds x
C. Meeting of concepts
D. Meeting of agreement
4. Is it possible for the beneficiary (exporter) sometimes, though not often, to make a draft on the bank to collect the money?
A. No. it isn’t
B. It is impossible by all mean
C. The draft must be drawn on the buyer to the order payment not the bank
A. Yes, it is x
5. A contract that is ultra vires is…….
A. Well enforceable
B. Unenforceable x
C. Valid
D. Effective
6. Most contracts contain an assurance that the exporter will …….. any defects in his products
A. Make good x
B. Take away
C. Alter
D. Modify
7. A warranty is aimed at:
A. Obtaining loans
B. Assurance of product performance x
C. Credit purchase
D. Profit making
8. It’s always good for the exporter to promote his skills and the excellence of his products……
A. In the contracts documents
B. In the payment clause
C. In the recital x
D. In the delivery clause
9. To avoid the dangers of the slow payment, exporters try to protect themselves with a clause like this:” payment shall be deemed to have been made only when…..”
A. The buyer instructs the bank to pay
B. The buyer pays the money into his bank
C. The buyer’s bank transfers funds
D. Funds reach the seller’s bank account and at his full disposal x
10. The essence of Continental law is
A. Codification x
B. Verification
C. Authentication
D. Ratification
11. Allowing the buyer to repair the equipment at the exporter’s cost ……..
A. Is always the best choice to the exporter
B. Is always the worst choice to the exporter
C. Is often safe for exporter
D. Is often unsafe for exporter x
12. A contract comes into force when an offer is made by one side and …… by other
A. Accepted x
B. Declined
C. Written
D. Drawn
13. Termination may be for…..
A. Disruption
B. Authentication
C. Convenience x
D. Adoption
14. In settlement by deferred payment, the letter of credit is paid after delivery. Right or wrong?
A. Completely right
B. Definitely wrong
C. It depends
D. The letter of credit is not payable until a number of days x
15. Assuming shipment is by rail, what if a letter of credit demands the original bill of lading?
A. It is possible demand
B. The original of the bill of lading for shipment by rail does not come into the possession of the buyer.
C. Such a letter of credit is certain to cause delay in payment x
B. The bank insists on strict compliance
16. (Note: If either party is prevented from, or delayed in, performing any duty under this contract by an event beyond his reasonable control, then this event shall be deemed force majeure)
A lockout (Background: The workers have been striking for one day a week. The management locks the workers out of factory until they agree to end the strike)
A. Yes
C. No x
17. Who usually pays for curing defects?
A. The importer
B. The exporter x
C. Both parties
D. A third party
18. Elderly people are …to deal with contract
A. Unable
B. Able x
C. Impossible
D. Unaffordable
19. If the buyer comes from a country which has a poor reputation for enforcing awards, the best method of payment under the contract is a/an……..
A. Revolving L/C
B. At sight, confirmed L/C x
C. Deferred, irrevocable L/C
D. Transferable L/C
20. Which of the following is essential to successful business?
A. Quality
B. Customer satisfaction x
C. Correct marking and packaging
D. On-time delivery
21. Different legal systems regulate that rejection of delivered goods must be total ………can be partial.
A. Or x
B. And
C. And/or
D. Nor
22. If both parties perform their duties exactly according to the contract, the contract is……….
A. Discharged by performance x
B. Discharged for performance
C. Discharged to performance
D. Discharged with performance
23. (Note: If either party is prevented from, or delayed in, performing any duty under this contract by an event beyond his reasonable control, then this event shall be deemed force majeure)
A fire burns down the factory
A. Yes x
B. Questionable
C. No
24. The grace period is sometimes used to …..
A. Avoid penalty
B. Facilitate early delivery x
C. Avoid liquidated damages
25. To make sure that the officer signing the contract has authority to sign the contract, parties should check………………
A. The duplicate of the signature
B. The authenticity of the signature x
C. The coverage of the signature
D. The transferability of the signature
26. A term or terms in a contract could raise the contract price
A. A shorter warranty period
B. Customer order goods in one color
C. No additional packaging or safety warnings are required beyond normal standards
D. A longer warranty period x
27. The disadvantage of……policy is that it is set up for particular time and automatically expires.
A. tailor – made
B. floating x
C. open cover
28. ………….. is opened-ended
A. Tailor-made
B. Floating
C. Open cover x
29. The bank helping the exporter to check the correctness of the documents and set the payment procedure in motion is
A. The issuing bank
B. The advising bank x
C. The confirming bank
D. Any third bank
30. Delivery of the goods under the most export contracts take place in a country of :
A. The importer
B. The exporter x
C. The agent
31. The stand-by letter of credit originated in the US is used there because …
C. The banking law in some states forbids banks to issue payment guarantee x
D. English banks prefer to issue demand guarantees and ordinary letters of credit. x
32. The method of payment which is dangerous for the exporter is:
A. Cash on delivery
B. Accepting a personal check x
C. Prepayment
D. Export credit insurance
33. Another name for tender guarantee is
A. Revocation guarantee
B. Bid guarantee
C. Bond guarantee
D. Bid bond x
34. …….bill of lading- goods were taken on board in good conditions
A. Clean x
B. Dirty
C. Claused
35. (Note: If either party is prevented from, or delayed in, performing any duty under this contract by an event beyond his reasonable control, then this event shall be deemed force majeure)
A volcanic eruption buries the factory in ash
A. Yes x
B. Questionable
C. No
36. The entire agreement clause means that all documents that predicts the contract
A. Are still valid
B. Become important
C. Become invalid x
D. Can be used as evidence
37. A guarantee is:
A. A Unilateral
B. B. Tripartite x
C. C. Bilateral
D. D. Multilateral
38. When the bill of lading marked “freight collected”. Who pays for freight?
A. The buyer x
B. The seller
C. The agent
D. It depends on the agreement
39. The greatest fear for the exporter is :
A. Being unable to meet the delivery deadline
B. Being unable to meet the specification of the goods
C. Being unable to get paid for the goods sold x
D. Having no guarantee for payment
40. If shipment is made on CIF or CPI terms, the letter of credit will call for
A. An insurance policy
B. A letter of insurance
C. A certificate of insurance
D. Either A or C x
41. The final quality hurdle is the ……….. during which the exporter is liable to cure defects that come to light in the goods.
A. Guarantee period
B. Defect liability period x
C. Correction methods
D. Quality assurance requirements
42. Earthquake, volcanic eruption and lighting are not covered under the cargo clause ….
A. A
B. B
C. C x
D. B and C
43. The legal action period varies greatly from law to law. Which of these defines this period that is equal to and concurrent with the defects liability period?
A. The UCC
B. The BGB x
C. Continental law
D. English law
44. The lump-sum compensation is set about right
A. A. liquidated damages. x
B. B. quasi indemnity
C. C. penalty
45. The point of delivery is much the same for all ….. terms and ……terms – when the exporter hands the goods over to the carrier.
A. C and F x
B. D and F
C. C and D
46. Export credit insurance is very attractive; however, it has certain limitations like …….
A. High premium paid by the exporter
B. Long time waiting for compensation from the insurance company
C. Long time since the buyer fails to pay up to the time the insurance company compensates the exporter and the inability of covering 100% of the original invoice price. x
D. Refusal from the insurance company to quote premiums due to risky business or the buyer’s non- creditworthiness.
47. Which type of payment is the most advantageous for the exporter?
A. Credit by sight payment x
B. Credit by deferred payment
C. Credit by acceptance
D. Credit by negotiation
48. Transfer of risks from the seller to the buyer ( Incoterm 2000) : CPT
A. When the goods are at seller’s premises
B. When the goods are handed to the first carrier x
C. When the goods across the ship’s rail
D. When the goods are on board
49. The period during which the buyer can begin a legal action is legally called:
A. Notification
B. Rectification
C. Legal action period x
D. Detect liability period
50. A payment guarantee simply commits the bank to pay if the buyer defaults. The payment guarantee is usually for… of the contract price
A. 100% x
B. Less than 100%
C. 10%
D. Between 5% and 10%
ĐỀ 22
1. The legal action period varies greatly from law to law. Which of these defines this period that is equal to and concurrent with the defects liability period?
A. The UCC
B. The BGB x
C. Continental law
D. English law
2. Bill of lading is the most important because it is a…..
A. Document of title x
B. Document of negotiation
C. Document of freight
3. Which of the following is the objective aimed at by the exporter to minimize the risk of the goods being rejected or of heavy defects liability claims?
A.Winning buyer’s goodwill
B. Keeping this promise
C. Negotiating detailed specifications x
D. Making profit
4. In a contract under a Continental law, a recital….
A. is essential
B. is not useful
C. is not essential x
D. is important
5. Exporters prefer:
A. the return of the defective item to the replacement of it
B. the replacement of the defective item to the return of it x
C. the return of the goods and refund of the price
D. non of these
6. The fact that manufacturer often tempted to be over-optimistic and to agree to impossible specifications is…in business
A. lucrative
B. risky x
C. advantageous
D. common
7.In settlement by acceptance, the kind of bill of exchange being sent together with other documents to the accepting bank is…
A. Sight draft
B. Short-term draft
C. Time draft x
D. Long-term draft
8. What are common discrepancies reported by banks in practice?
A. They are problems with the letter of credit
B. They are problems with the Bill of lading
C. They are problems with insurance and/or the inconsistencies among the documents
D. Any of the above x
9. There is no connection between the letter of credit and the sales contract. Right or wrong?
A. Completely right x
B. Completely wrong
C. It depends
D. The exporter and the buyer may agree that all the term in their sales contract must be stated in the letter of credit
10. The parties to a contract are not always required to…the Vienna Sales Convention
A. Ignore
B. Apply x
C. Refuses
D. Decline
11. What does”3/3 Marine Bill of Lading” mean?
A. It means the exporter must produce three originals and three copies of the marine bill of lading x
B. It means the exporter must produce three original out of the whole three which have been issued by the shipping company
C. It means the number of originals and that of copies of the marine bill of lading required are always the same
D. It means the marine bill of lading must be issued in three originals and three copies
12. The rules of international common law decide the law that applies for the contract if the contract does not specify the….
A. Common law
B. Civil law
C. Case law
D. Applicable law x
13. Within most Anglo-American jurisdictions, a contract
A. can be one-sided
B. can be two-sided
C. can be either one-sided or two-sided
D. must be two-sided x
14. What if a letter of credit calls for “a complete set of original air waybills”?
A. The exporter has to present the full set of original air waybills if he wants to get payment from the bank
B. The exporter cannot provide the complete set
C. This is obviously a mistake.
D. Only the second original of the air waybill goes to the consignee. The bank, however, will follow the wording of the letter of credit exactly and refuse an “incomplete set” waybills x
15. Which of the following discrepancies is NOT the problem with Insurance
A. Documents are not presented within the required timex
B. The sum insured is below the figure required
C. The insurance risks are not those specified in the credit
D. A certificate of insurance is produced while the credit calls for a policy
16. The buyer can reject goods that are not of saleable quality. This is called…
A. Implied warranty of the suitability
B. Implied warranty of conformity
C. Implied warranty of merchantability x
D. Implied warranty of fitness for intended purpose
17. Contract documents must be given…….in case of contradictions
A. an order of seniority
B. anorder of precedence x
C. order of rules
D. either a or b
18. As for Anglo-American law, the decision of the judge is always….
A. Predictable
B. Foreseeable
C. Unpredictable x
D. Estimated
19. To make sure that the officer signing the contract has authority to sign the contract, parties should check…..
A. The duplicate of the signature
B. The authenticity of the signature x
C. The coverage of the signature
D. The transferability of the signature
20. The cheapest mode of transport is…
A. by sea x
B. by air
C. by road
21. The lump-sum compensation is set too high
A. liquidate damages
B. quasi indemnity
C. penalty x
22. The cost of L/C amendments are normally for….
A. the buyer’s account
B. the exporter’s account
C. the issuing bank’s account
D. the one who asks for such amendments x
23. According to the UCC, how long is the legal action period?
A. Two years
B. Three years
C. Four years x
D. One years
24. Which of the following is NOT true?
A. A letter of credit is a binding agreement by the buyer to pay a certain sum of money when the exporter presents the necessary documents x
B. A letter of credit is like a bill of exchange given for the price of goods
C. A letter of credit ranks as cash and must be honored
D. No set off or counterclaim is allowed to detract from a letter of credit
25. What is a letter of credit requires “an appropriate wildlife certificate”?
A. It is a vague requirement
B. The bank and the exporter may have different views on what is “appropriate”
C. It should be more specific like what the certificate must show and who should issue it
D. All of the above x
26. Open cover is not a policy: the….will write a policy if required
A. Insurer x
B. Importer
C. Exporter
27…..refer(s) to the questions of implied warranties
A. Most contracts
B. Most laws x
C. The UCC
D. The Vienna Sales Convention
28. A contract requiring the exporter to send the contract goods by road from Kenya to Zambia with freight paid by the exporter.
A. CFR Lusaka
B. CPT Lusaka x
C. CFR Nairobi
29. A grace period is sometimes used to….
A. avoid penalty
B. facilitate early delivery x
C. avoid liquidated damages
30. Which of these does not count as a defect?
A. Defective design
B. Misuse x
C. Defective materials
D. Defective workmanship
31. Partial invalidity clause can help to avoid problems with contracts that…
A. might infringe government regulations x
B. violate the trade laws
C. discourage trade
D. both b and c
32. If shipment is made on CIF or CIP terms, the letter of credit will call for….
A. An insurance policy
B. A letter of insurance
C. A certificate of insurance
D. Either A or C x
33. Is there any requirement that the air waybill shows the date of the flight?
A. No, there isn’t
B. Yes, there is x
C. Never is there such a requirement
D. No, it is an incorrect requirement because a correctly completed waybill cannot show this information
34. The contract should regulate what happens if Incoterm 2000 and the term of the contract conflict: normally the ….prevails
A. Incoterm
B. Contract x
C. Incoterm and contract
35. In CIF and CIP contracts,… must pay for insurance from the point of delivery to the named point of arrival
A. The exporter x
B. The importer
C. The carrier
36. The disadvantages…of policy is that it is set up for paticular time and automatically expires
A. tailor-made
B. floating x
C. open cover
37. Defects may be which of the following?
A. Defects in materials
B. Defects in workmanship
C. Both x
D. None of these
38. The bank helping the exporter to check the correctness of the documents and set the payment procedure in motions is….
A. The issuing bank
B. The advising bank x
C. The confirming bank
D. Any third bank
39. What are the set of assumptions with which a price quotation is based?
A. Mode of payment, timing, place of payment
B. Delay in payment and results of delay
C. Choices of method of payment
D. Delivery, payment and warranty terms x
40. ….Bill of lading-goods were taken on board in good condition.
A. clean x
B. dirty
C. claused
41. Anglo-American law is
A. Law code
B. Case law x
C. Civil law
D. Legal code
42. The decision of arbitrators is
A. Law-oriented
B. Business-oriented x
C. Action-oriented
D. Reaction-oriented
43. “Export credit insurance is a kind of special privilege that an exporter may get from his government’s export incentives and suport”. Right or wrong?
A. Completely right
B. Absolutely wrong
C. Neither right or wrong
D. It is not a charity. It is beneficial for both exporter and insurance company x
44. If the box “With brief advice by teletransmission” is crossed, it means….
A. The exporter wants to be informed of the inssuance of the letter of credit by telex x
B. The exporter wants to begin preparations for delivery
C. The buyer’s responsibility of informing the exporter that a letter of credit has been issued in his favor
D. The exporter wants to know about the inssuance of the letter of credit more quickly
45. According to the UCC, if the goods fail in any respect to conform to the contract, the buyer may….
A. reject the whole
B. accept the whole
C. accept any commercial unit and reject the rest
D. All the above x
46……..is two-sided procedures
A. Termination
B. Cancellation
C. Rescission x
D. Suspension
47. Transfer of risk from the seller to the buyer ( Incoterm 2000 ): CPT
A. When the goods are At the seller’s premises
B. When the goods are handed to the first carrier x
C. When the goods across the ship’s rail
D. When the goods are on board
48. In a contract, the word “whereas” means….
A. “only that”
B. “while”
C. “when”
D. “because” or “considering that” x
49. “ Full set on board ocean bills of lading to order shipper, bank endorsed”. In this clause shipper means….
A. Exporter
B. Importer
C. Bank
D. A or B or C. It depends on the situation x
50.Discount Records bought phonograph records from an exporter. Payment was by letter of credit issued by Barclays Bank. The exporter delivered a mix of cassettes eight- track cartridges and other non-contractual goods. Discount Records tried to get an injunction to stop Barclays from paying under the letter of credit. What you think the court would do in that case?
A. The court refused
B. The court accepted
C. The court would not involve
D. The exporter will be paid-although later action in the courts may oblige him to make good any damage he has caused the buyer. x
ĐỀ 23
1. Title to the goods passes…
A. With risks x
B. Without risks
C. With documents
2. Partial invalidity clause can help to avoid problems with contracts that …
A. Might infringe government regulations x
B. Violate the trade laws
C. Discourage trade
D. Both B and C
3. Which of the following discrepancies is NOT the problem with inconsistencies among the document?
A. The description of the goods on the invoice and the description of the goods in the credit are different
B. Documents are not presented with the required timex
C. Weights differ between two documents
D. Marks and number differ among documents
4. Drunken people have no … to sign a contract
A. Contractual capacity x
B. Contractual concept
C. Contractual government
D. Contractual branch
5. Cancellation on … grounds makes no legal sense
A. Great
B. Genuine
C. Trivial x
D. Acceptable
6. The … has no power to enforce his solution or to bind the parties, his task is to suggest a fair solution only
A. Judge
B. Conciliator x
C. Magistrate
D. Lawyer
7. In settlement by acceptance, what will the bank do after receiving the documents and draft on the buyer from the seller?
A. The bank will pay the seller immediately
B. The bank will pay the seller as long as the documents submitted comply with all the terms of the letter of credit
C. The bank checks the documents
D. The bank agrees to pay the bill when it matures x
8. “Full set on board ocean bills of lading to order shipper, bank endorsed”. In this clause shipper means…
A. Exporter
B. Importer
C. Bank
D. A or B or C. it depends on the situation x
9. A bill of lading with the note is …
A. Clean bill of lading
B. Clause bill of lading x
C. Clear bill of lading
10. The exporter should have no liability for the goods when they are …
A. Beyond his control x
B. In his control
C. Under his control
11. Export credit insurance which gives the exporter an acceptance level of security in terms of payment shall be paid by …
A. The buyer
B. The exporter x
C. A bank
D. An insurance company
12. If a contract is the entire agreement, earlier letters and documents …
A. Can be used as evidence
B. Become invalid x
C. Prevail
D. Remain important
13. Shortage of supplies (Background: the exporter cannot get the raw jute he needs from the supplier because of a shipping delay)
A. Yes x
B. Questionable
14. If a dispute arises, the recital allows the court to discover the real meaning of …
A. The contract x
B. The term
C. The incoterms
D. The appendix
15. The method of payment which is completely safe for the seller in small purchases is …
A. Open account x
C. Cash against invoice x
D. Cash with order x
16. The applicable law governs questions concerning the validity, … , performance of contracts.
A. Interpretation x
B. Payment
C. Correction
D. Acceptance
17. The force majeure clause suggested by the International Chamber of Commerce, for example, states the payment of interest on overdue sums payable to the seller is … by …
A. Excused/force majeure
B. Not excused/force majeure x
C. Excused/Acts of God
D. Excused/contingencies
18. Why can a manufacturer sometimes accept a loss on an export deal
A. He wants to win a regular customer
B. His factory may be short of work
C. Ha can get some export incentives from the government
D. Any of the above x
19. Defects such as wrong items, broken or missing parts, scratches, and so on are called …
A. Patent defects x
B. Latten defects
C. Inherent defects
D. Concealed defects
20. Transfer risk from the seller to the buyer (Incoterms 2000): DDP
A. When the goods are at the buyer’s premises x
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the goods are on board21.
21. In a contract under a Continental law, a recital …
A. Is essential
B. Is important
C. Is not useful
D. Is useful x
22. A liquidated damages clause protects …
A. The exporter rather than the importer
B. The importer rather than the exporter
C. Both sides x
D. Neither the exporter nor the importer
23. If the price is quoted FOB Singapore, who pays for the insurance and freight?
A. The exporter
B. The buyer x
C. The forwarding agent
D. The confirming bank
24. Earthquake, volcanic eruption and lighting are covered under the cargo clause …
A. A
B. B
C. C
D. A and B x
25. A well-designed set of specifications protects:
A. The exporter
B. The importer
C. Both parties x
D. Neither of these
26.
27. What if a letter of credit requires “an appropriate wildlife certificate”?
A. It is a vague requirement
B. The bank and the exporter may have different views on what is “appropriate”
C. It should be more specific like what the certificate must show and who should issue it
D. All of these above x
28. In principle the buyer can reject delivered goods if they do not conform to the contract. This is called …
A. Implied warranty of suitability
B. Implied warranty of conformity x
C. Implied warranty of merchantability
D. Implied warranty of fitness for intended purpose
29. The place of payment is very important because late payment is subject to payment of interest and the cost of any delay along the payment route properly belongs to …
A. The buyer x
B. The exporter
C. The bank of the exporter
D. The bank of the buyer
30. Which of these is the cheapest option for the exporter?
A. Repair x
B. Replace (part or whole item)
C. Reduce the price
D. Return the goods
31. If the buyer can make certain assumptions about goods-even if the exporter gives no express warranty, these assumptions are called…
A. Explicit warranties
B. Exotic warranties
C. Unspoken warranties
D. Implied warranties x
32. It is … to identify latent defect than patent defect.
A. Easier
B. More complicated x
C. More effective
D. Better
33. Independent inspection reports on …
A. The weight of the goods
B. The size of the goods
C. Both A and B x
D. None of these
34. Two parties sign a contract
A. The contract is binding x
B. The contract is effective
C. The contract is binding and effective
35. Which of the following is NOT the method of issuing letter of the credit?
A. By email x
B. By airmail
C. By mail
D. By teletransmission
36. The fact that manufacturer often tempted to be over-optimistic and to agree to impossible specifications is … in business
A. Lucrative
B. Risky x
C. Advantageous
D. Common
37. In CIF and CIP contracts, … must pay for insurance from the point of delivery to the named point of arrival
A. The exporter x
B. The importer
C. The carrier
38. The decision of arbitrators is …
A. Law-oriented
B. Business-oriented x
C. Action-oriented
D. Reaction-oriented
39. The Vienna Sales Conventions is also called: …
A. The Uniform Law of International Sale
B. The Uniform Law on the Contracts for the International Sale of Goods
C. The United Nations Convention on Contracts for the International Sale of Goods x
D. The United Nations Convention on Contracts for acceptance
40. If a country ratifies the Vienna Convention, in the event of conflict, the Vienna Sales Convention can … the National law.
A. Prevail over x
B. Conform to
C. Follow
D. Adapt
41. Who issues a bank guarantee?
A. The buyer
B. The exporter
C. Any third party
D. A bank x
42. What would be the effect on the price of the goods traded of the buyer wants the goods sooner?
A. The price of the goods will go up
B. The price of the goods will go down
C. There is no change in price
D. The price of the goods will go up as extra costs involved due to extra working shift from the manufacturer x
43. If alternative means of transport of partial shipments are allowed perhaps by different modes of transport, the letter of credit should have the words … between the names of transport documents.
A. And
B. Or
C. And/or x
D. Either B or C
44. Which of the following discrepancies is NOT the problem with the Bill of Lading?
A. The bill of lading is “unclean”
B. The bill of lading shows shipment between ports other than those specified in the credit
C. The discrepancies of the goods on the invoice and the description of the goods in the credit are different x
D. There is no endorsement if the endorsement is necessary
45. Who signs “shipped on board” notation?
A. Captain x
B. Exporter
C. Shipping company
D. Agent
46. What happens first when a bank refuses to pay under a letter of credit?
A. The bank will cite a “discrepancy”, some aspect of the documentation that is not line with the term of the creditx
B. A check –list of commonly cited discrepancies will be used by banks
C. The exporter will have to re-submit their shipping document
D. The exporter must contract the buyer asking the buyer to instruct the issuing banj to extend the date of the credit
47. The defects liability period is also called:
A. Warranty period x
B. Guarantee period
C. Correction action period
D. Legal action period
48. Anglo-American law is …
A. Law code
B. Case law x
C. Civil law
D. Legal code
49. Shortage of supplies (background: the exporter cannot get the raw jute he needs from the supplier because the Central Bank will not give him foreign exchange to pay the supplier)
A. Yes
B. Questionable
C. No x
50. A bank guarantee which gives the exporter an acceptable level of security in terms of payment shall be paid by …
A. The buyer x
B. The exporter
C. A bank
D. A third party
Đề 24
1. The point at which money is deemed to be paid most referred by buyer is……………….
A. When the buyer pays the money into his bank
B. When the buyer’s bank transfers funds
C. When the buyer instructs the bank to pay
D. When the funds reach the seller’s bank account x
2. If the price is quoted FOB Singapore, who pays for the insurance and freight?
A. The exporter
B. The buyer x
C. The forwarding agent
D. The confirm
3. Defects that come to light after buyer’s acceptance are called…
A. Patent defects
B. Latent defects x
C. Coherent defects
D. Apparent defects
4. Replacing a defective product helps to keep the ……… of customer.
A. Goodwill x
B. Good image
C. Good business
D. Wellbeing
5. If the force majeure event continues for too long, both parties have the right to
A. Continue the contract
B. Terminate the contract x
C. Make late delivery
6. Parties to contract for the sale of goods are free to choose.
A. Applicable law x
B. International law
C. Corporate law
D. Business law
7. Which of the following is not the method of issuing the letter of credit?
A. By email x
B. By airmail
C. By mail
D. By teletransmission
8. When an offer is made, it is not applicable when it has…..?
A. Suspension
B. Renovation
C. Revocation x
D. Adaptation
9. In drafting an arbitration clause, the following question must be resolved:
A. How many arbitrators sit in the court?
B. What is the language of the court?
C. Where is the place of the court?
D. All the above x
10. Which corrective method is least favorable for the seller
a. Replace the wrong items
b. Reduce the price
c. Return the goods and refund the price x
d. Repair the goods
11. … happens when one party end the contract because of breach by the other
A. Cancellation x
B. Suspension
C. Impossibility
D. Termination
12. Defects such as wrong items, broken or missing parts, scratches, and so on are called
A. patent defects x
B. latent defects
C. inherent defects
D. concealed defects
13. In a guarantee, a guarantor is often:
A. The buyer
B. The seller
C. The bank x
D. The manufacturer
14. If alternative means of transport of partial shipments are allowed perhaps by different modes of transport, the letter of credit should have the words … between the names of transport documentation.
A. And
B. Or
C. And/or x
D. Either B or C
15. The costs of L/C amendments are normally for………
A. the buyer’s account
B. the exporter’s account
C. the issuing bank’s account
D. the one who asks for such amendments x
16. 'Door to door service" is offered. Which term should be used?
A. DDP x
B. CIF
C. CIP
17. If a contract is an entire agreement, earlier letters and documents……..
A. Can be used as evidence
B. Become invalid x
C. Prevail
D. Remain important
18. Anglo-American law is also called…..
A. Civil law
B. Legal code
C. Common Law x
D. Law code
19. Which of these allow(s) rejection if only defective or non-conforming goods?
A. English law
B. German law and the Vienna Sales Convention x
C. The UCC
D. Vietnamese law
20. The bank notifying the exporter that the letter of credit has been opened is called
A. The issuing bank.
B. The advising bank. x
C. The confirming bank.
D. The opening bank.
21. When the bill of lading marked “freight collected”. Who pays for freight?
E. The buyer x
F. The seller
G. The agent
H. It depends on the agreement
22. …original(s) Bill of lading constitute(s) a full set
a. 1
b. 2
c. 3 x
23. The exporter must know the legal identity of the buyer ………… that may arise.
A. Resolve payment problems x
B. Settle disputes x
C. Solve problems x
24. In settlement by acceptance, what will the bank do after receiving the documents and draft drawn from on the buyer from the seller?
A. The bank will pay the seller immediately
B. The bank will pay the seller as long as the documents submitted comply with all the terms of letter of credit.
C. The bank checks the documents
D. The bank agrees to pay the bill when it matures x
25. Returned shipment to the exporter’s country means:
A. The deal is a total loss for the exporter x
B. The exporter takes back the whole shipment
C. The exporter makes a small profit
D. The deal is a total loss for the importer
26. Transfer of risk from the seller to the buyer ( Incoterm 2000) : DDU
A. When the goods are at the buyer’s premises x
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the goods are on board
27. In some legal system, the buyer has the right … duty to inspect delivered goods
A. and
B. Or
C. and/or
D. but x
28. The workforce at the factory goes on strike ( force majeure)
B. Questionable x
C. No
29. Which of the following discrepancies is NOT the problem with the Letter of Credit?
A. The credit has expired
B. Document required by the credit are missing
C. The credit amount is exceeded
D. Insurance cover is expressed in a currency other than that of the credit x
30. Who usually pays for curing defects?
A. The buyer
B. The seller x
C. Both the buyer and the seller
D. The manufacturer
31. In most guarantees, the bank agrees to pay “on first demand” which means…
A. Serious and objective conditions must be met by the beneficiary before claiming payment of the guarantee
B. With demur or objection
C. Without cavil and demur
D. Without demur or objection x
32. A fire burns down the factory ( force majeure)
D. Yes x
E. Questionable
F. No
33. A ban is issued on the export of jute products by newly elected government
B. Questionable x
C. No
34. Which of the following is NOT true?
E. A letter of credit is a binding agreement by the buyer to pay a certain sum of money when the exporter presents the necessary documents x
F. A letter of credit is like a bill of exchange given for the price of goods
G. A letter of credit ranks as cash and must be honored
H. No set off or counterclaim is allowed to detract from a letter of credit
35. Another name for Tender Guarantee is …
A. Revocation guarantee
B. Bid guarantee
C. Bond guarantee
D. Bid bond x
36. The parties to a contract are not always required to... the Vienna Sales Convention
A. Ignore
B. Apply x
C. Refuse
D. Decline
37. What are common discrepancies reported by banks in practice?
E. They are problems with the letter of credit
F. They are problems with the Bill of lading
G. They are problems with insurance and/or the inconsistencies among the documents
H. Any of the above x
38. Why letters of credit are formally called “documentary credits”?
A. Because a letter of credit is a binding agreement by a bank to pay a certain sum of money when the exporter presents the necessary documents to the bank.
B. Because a letter of credit is issued by an issuing bank at the request of the buyer
C. Because in a letter of credit situation, documents are exchanged for money x
D. Because the documents in a letter of credit are proofs of trust.
39. Inspection by the ………. Is called “ open package inspection”
A. Custom officers
B. Carrier
C. Exporter
D. Importer x
40. Termination may be for…
a. Disruption
b. Authentication
c. Convenience x
d. Adoption
41. In international trade, if payment is made on delivery, the method of payment to be chosen will be……………………………….
A. Bank guarantee
B. Open account
C. Export credit insurance
D. At sight letter of credit x
42. In contract, “partial invalidity provision” means the invalidity of one part of the contract…
A. May invalidate the rest
B. Does not invalidate the rest x
C. Affects the rest
D. Enforces the rest
43. Beside the commercial invoice, the transport document and the insurance document, what does “Other document” include?
A. A certificate of origin
B. A certificate of inspection
C. A health inspection
D. Any of the above x
44. When the bill of lading marked “freight prepaid”. Who pays for the freight?
A. The buyer
B. The seller x
C. The agent
D. It depends on the agreement
45. The best solution for the exporter to make late payment impossible is
A. A typical contract clause in which there are regulations on the amount of interest the seller shall be entitled to receive in case of late payment.
B. An agreement with the buyer to strengthen the payment provisions with a payment guarantee
C. An agreement with an insurance company in case the buyer fails to pay on time
D. A confirmed, irrevocable, at sight letter of credit. x
46. Which is the most appropriate method of payment for the exporter in the following case? Sale of a bale (roll) of cloth costing 200 USD to a nearly tailor’s shop with whom you have done business for 20 years.
A. Confirmed letter of credit.
B. Open account with no security x
C. Open account with bank guarantee
D. Open account with export credit insurance
47. The lump-sum compensation is set about right
A. liquidated damages. x
B. quasi indemnity
C. penalty
48. In terms of payment in international trade.
A. Risk rises and cost rises as well
B. Risk falls and cost falls as a consequence
C. Risk and cost have no relationship with each other
D. Risk and cost rise and fall together x
49. Contract documents must be given…….in case of contradictions
E. an order of seniority
G. order of rules
H. either A or B x
50. The essence of Continental law is…
A. Verification
B. Authentication
C. Codification x
ĐỀ 25
1. The Vienna Sales Convention is also called:
A. The Uniform Law of International Sale
B. The Uniform Law on the Formation of Contracts for the international Sale of Goods
C. The United Nations Convention on Contracts for the International Sale of Goods x
D. The United Nations Convention on Contracts for acceptance
2. A well-designed set of specifications protects:
A. The exporter
B. The importer
C. Both parties x
D. Neither of these
3. According to the UCC, if the goods fail in any respect to conform to the contract, the buyer may.....
A. Reject the whole
B. Accept the whole
C. Accept any commercial unit and reject the rest
D. All the above x
4. What kind of inspection is particularly important for sophisticated items or capital goods?
A. Customs inspection
B. Carrier’s inspection
C. Pre-delivery inspection x
D. SGS’s inspection
5. When the bill of lading marked “freight prepaid”. Who pays for the freight?
A. The buyer
B. The seller x
C. The agent
D. It depends on the agreement
6. It is.......to identify latent defect than patent defect
A. Easier
B. More complicated x
C. More effective
D. Better
7. When the goods arrive, if they are........, the importer can reject them but if they....specifications, he is obliged to accept them
A. Defective/conform to x
B. Perfect/conform to
C. Defective/differ from
D. Perfect/differ from
8. Different legal system regulate that rejection of delivered goods must be total........can be partial
A. Or x
B. And
C. And/or
D. Nor
9. Which of the following is NOT considered to be special requirement in a sale/purchase contract?
A. Containers are required to be fumigated before shipment
B. Upgraded packaging materials
C. Goods must be packed according to export standards x
D. Health inspection for foodstuffs
10. In settlement by sight payment......
A. The seller presents the necessary documents to the issuing bank
B. The seller presents the necessary documents to the advising bank
C. The seller presents the necessary documents to the paying bank x
D. The seller presents the necessary documents to the reconfirming bank
11. Shortage of supplies (Background: The exporter cannot get the raw jute he needs from the supplier because the Central Bank will not give him foreign exchange to pay the supplier)
A. Yes
B. Questionable
C. No x
12. Who issues a bank guarantee
A. The buyer
B. The exporter
C. Any third party
D. A bank x
13. Which type of payment is the most advantageous for the exporter?
A. Credit by sight payment x
B. Credit by deferred payment
C. Credit by acceptance
D. Credit by negotiation
14. Feeble-minded people are legally unable to … contract
A. Sign x
B. Decline
C. Refuse
D. Resign
15. The answer to the question of implied warranties are supplied by:
A. The contract provision
B. The UCC
C. Most laws x
D. The contract
16. Unless the letter of credit states otherwise, insurance coverage on a CIF or CIP shipment must be for… of the CIF (or CIP) value of the goods
A. 100%
B. 90%
C. 50%
D. 110% x
17. Once the bank has indicated the discrepancies, what can the exporter do?
A. The exporter canprovide the missing paperwork or correct errors
B. The exporter can ask the buyer to instruct the bank to change the terms off the letter of credit
C. The exporter can ask the bank to process the LC with the discrepancies but to pay only when (and if) the issuing bank permits payment
D. Any of the above x
18. … happens when one party end the contract because of breach by the other
A. Cancellation x
B. Suspension
C. Impossibility
D. Termination
19. A contract is not enforceable if…
A. it is signed within power
B. It has a legal purpose
C. It has an illegal purpose x
D. It has no purpose
20. In some legal system, the buyer has the right … duty to inspect delivered goods
A. and
B. Or
C. and/or
D. but
21. Termination may be for…
A. Disruption
B. Authentication
C. Convenience x
D. Adoption
22. Transfer of risk from the seller to the buyer (Incoterm 2000) FAS
A. When the goods are ex-quay x
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the good are on board
23. The disadvantage of … policy is that it is set up for particular time and automatically expires
A. tailor-made
B. floating x
C. Open cover
24. A contract requiring the exporter to send the contract goods by road from Kenia to Zambia with freight paid by the exporter
A. CFR Lusaka
B. CPT Lusaka x
C. CFR Nairobi
25. Transfer of risk from the seller to the buyer (Incoterm 2000) DES
A. When the goodsare ex-ship x
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the goods are on board
26. Which of the following is not true?
A. a LC is binding agreement by the buyer to pay a certain sum of money when the exporter presents the necessary documents x
B. A letter of credit is like a bill of exchange given for the price of goods
C. A letter of credit ranks as cash and must be honored
D. No set off or counterclaim is allowed to detract from a letter of credit
27. In contract negotiation, “an invitation to provide terms and conditions” may mean:…
A. Another name for acceptance
B. Another name for an offer
C. An invitation to the other party to make an offer x
D. An invitation to the other party to accept an offer
28. In a contract under a Continental law, a recital…
A. is essential
B. Is not useful
C. is not essential x
D. is important
29. The greatest fear for the exporter is…
A. Being unable to meet the delivery deadline
B. Being unable to meet the specifications of the goods
C. Being unable to get paid for the goods sold x
D. Having no guarantee for payment
30. When there are words like “about” or “approximately” in the LC’s amount, how much can the actual payment be?
A. The actual payment therefore can be 10% more or 10% less than the stated amount x
B. The actual payment therefore can be 15% more or 15% less than the stated amount
C. The actual payment therefore can be 5% more or 5% less than the stated amount
D. The actual payment therefore can be between 5% and 10% of the stated amount
31. Which of the following is not the reason why the exporter prefer a longer expiry period of credit?
A. He wants to save bank charges
B. He wants enough time after deliver to present the documents
C. He wants to have enough time to correct any discrepancies that might be discovered by the bank
D. he wants to spare some time for any unexpected things preventing his presentation of documents on time
32. Agreements, under Anglo-American law, are of…
A. two types x
B. Three types
C. Four types
D. Five types
33. In principle the buyer can reject delivers goods if they do not confirm to the contract. This is called…
A. Implied warranty of suitability
B. Implied warranty of conformity x
C. Implied warranty of marchantability
D. Implied warranty of fitness for intended purpose
34. Earthquake, volcanic eruption and lighting are not coverd under the cargo clause…
A. A
B. B
C. C x
D. B and C
35. In how many originals and copies is the air waybill issued according to the standard of the International Air Transport Association-IATA?
A. Three originals and three copies
B. Three originals and six copies
C. Three originals and nine copies x
D. It depends on the requirements in the LC
36. The bank helping the exporter to chack the correctness of the documents and set the payment procedure in motion is…
A. The issuing bank
B. The advising bank x
C. The confirming bank
D. Any third party
37. Which type of bill of lading is negotiable?
A. surrender
B. straight
C. to order x
38. The two terminologies which mean the same thing are…
A. Guarantee and Warranty
B. Bond and Surety
C. Warranty and defects liability x
D. Guarantee and Insurance
39. …. Bill of lading-goods were taken on board in good condition
A. Clean x
B. Dirty
C. Claused
40. The names of…. Are normally the full, registered name of the company
A, the exporter
B. the buyer
C. either the exporter or the importer
D. the parties x
41. In a contract, a formal definition is the best way od clarifying what exactly the two sides have….
A. Excuded
B. negotiated
C. Agreed x
D. solved
42. In most guarantee, the bank agree to pay “on first demand” which means…
A. Serious and objective conditions must be met by the beneficiary before claiming payment of the guarantee
B. With demur or objection
C. Without cavil and demur
D. Without demur or objection x
43. The contract should regulate what happen if Incoterm 2000 and the terms of the contract conflict normally the …. Prevails
A. Incoterm
B. Contract x
C. Incoterm and contract
44. The entire agreement clause means that all documents that predate the contract…..
A. are still valid
B. become important
C. become invalid x
D. can be used as evidence
45. After making the shipment of the good to the buyer, the exporter presents the shipping documents to….
A. the issuing bank
B. the advising bank x
C. the confirming bank
D. the opening bank
46. If the box “With brief advice by teletransmission” is crossed, it means….
A. The exporter want to be informed of the issuance of the LC by telex x
B. The exporter wants to begin preparations for delivery
C. The buyer’s responsibility of informing the exporter that a letter of credit has been issued in his favor
D. The exporter wants to know about the issuance of the LC more quickly
47. In contract, …. Is not normally allowed
A. Delegation of duties x
B. Assignment of rights
C. Performance of obligations
D. Fulfillment of duties
48. Inspection by the buyer is called
A. Independent inspection
B. Inspection of good prior to shipment
C. Open package inspection x
D. Customs inspection
49. Beside the commercial invoice, the transport document and insurance document, what do “Other documents” include?
A. A certificate of Origin
B. A certificate of Inspection
C. A health Inspection
D. Any of the above x
50. The point at which money is deemed to be paid most preferred by the seller is
A. When the buyer pays the money into his bank
B. When the buyer’s bank transfer funds
C. When the buyer instruct the bank to pay
D. When the funds reach the seller’s bank account x
ĐỀ 26
1. The official mailing addresses of the parties are given in...
A. The notices x
B. The appendices
C. The exhibits
D. The adoption
2. If shipment is under Incoterms other than CIF or CIP,......
A. The buyer has to arrange the insurance cover by himself
B. The buyer may still ask the exporter to arrange some aspects of the insurance for him
C. The exporter has to arrange the insurance cover for the goods
D. The exporter pays for insurance till the port of discharge x
3. Who signs “shipped on board” notation?
A. Captain x
B. Exporter
C. Shipping company
D. Agent
4. The fact that manufacturer often tempted to be over-optimistic and to agree to impossible specification is......in business
A. Lucrative
B. Risky x
C. Advantageous
D. Common
5. A contract comes into force when an offer is made by one side and.....by the other
A. Accepted x
B. Declined
C. Written
D. Drawn
6. A bank guarantee which gives the exporter an acceptable level of security in terms of payment shall be paid by....
A. The buyer x
B. The exporter
C. A bank
D. A third party
7. A bill of lading with the note is
A. Clean bill of lading
B. Claused bill of lading x
C. Clear bill of lading
8. Where is often the place of expiry of the credit?
A. At the counters of the issuing bank
B. At the counters of the advising bank
C. At the counters of the confirming bank x
D. At the counters of the negotiating bank
9. For the exporter, the option to repair a defective item abroad......
A. Is negligent
B. Can be costly x
C. Is always the best choice
D. Is always the worst choice
10. Anglo-American law is also called:
A. Common law x
B. Civil law
C. Law code
D. Legal code
11. If both parties perform their duties exactly according to the contract, the contract is.........
A. Discharged by performance x
B. Discharged for performance
C. Discharged to performance
D. Discharged with performance
12. What happens first when a bank refuses to pay under a letter of credit?
A. The bank will cite a “discrepancy”, some aspect of the documentation that is not in line with with the terms of credit x
B. A check – list of commonly cited discrepancies will be used by banks
C. The exporter will have to re-submit their shipping documents
D. The exporter must contact the buyer asking the buyer to instruct the issuing bank to extend the date of credit
13. What do export insurance premiums depend on?
A. Type of goods exported
B. Creditworthiness of the buyer
C. The political stability of the buyer’s country
D. All of the above x
14. Continental law is also called...
A. Civil law x
B. Common law
C. Legal system
D. Lawful case
15. What is transferable credit?
A. It is the kind of credit which allows the exporter to transfer his right as the credit’s beneficiary to any third party
B. It is the kind of credit which allows the first beneficiary to request the confirming bank to pay a third party x
C. It is the kind of negotiable document with which the exporter can endorse for any third party
D. It is the kind of credit with which the buyer will not necessarily know who is the actual supplier of the goods
16. The Incoterm....contains 11 terms
A. 1990
B. 2000
C. 2010 x
17. When a contract is canceled, a payment problem arises, the party in breach has a.....case of payment
A. Strong
B. Weak x
C. Solid
D. Big
18. Delivery of the goods under most export contracts takes place in the country of ........
A. The importer
B. The exporter x
C. The agent
19. Which of the following is NOT a method of issuing the letter of credit
A. By email x
B. By airmail
C. By mail
D. By teletransmission
20. When the bill of lading marked “freight prepaid”. Who pays for the freight?
A. The buyer
B. The seller x
C. The agent
D. It depends on the agreement
21. Exporters prefer:
A. The return of the defective item to the replacement of it
B. The replacement of the defective item to the return of it x
C. The return of the goods and refund of the price
D. None of these
22. .........refer(s) to the questions of implied warranties
A. Most contracts
B. Most laws x
C. The UCC
D. The Vienna Sales Convention
23. Another name for Tender Guarantee is.......
A. Revocation guarantee
B. Bid guarantee
C. Bond guarantee
D. Bid bond x
24. Who issues ocean bill of lading?
A. Captain
B. Exporter
C. Shipping company x
D. Agent
25. Dawson bought vanilla beans from Indonesia. Dawson instructed an American bank to open a letter of credit. One of the required shipping documents was a certificate of quality issued “by experts”. The bank paid the exporter. The beans, when they arrived, were rubbish. The certificate of quality was signed, however, by only on “expert”. Could the bank collect from Dawson the money it had paid to the exporter?
A. Definitely it could
B. Probably it could
C. No it couldn’t x
D. No question it could
26. If the buyer can make certain assumptions about goods – even if the exporter gives no express warranty, these assumptions are called.......
A. Explicit warranties
B. Exotic warranties
C. Unspoken warranties
D. Implied warranties x
27. When the bill of lading marked “ freight collected”. Who pays for the freight?
A. The buyer
B. The seller
C. The agent
D. In depends on the agreement x
28. The risk of rough handling is not covered under the cargo clause.......
A. A
B. B
C. C
D. B and C x
29. Who issues the bank guarantee?
A. The buyer
B. The exporter
C. The third party
D. A bank x
30. An FOB sales contract agrees that the exporter can deposit the goods in a warehouse if the ship arrives late and that this counts as delivery. If the letter of credit requires a bill of lading and makes no mention of a warehouse receipt,
A. the exporter will still be paid against a warehouse receipt
B. the bank simply cannot pay against a warehouse receipt x
C. the buyer refuses to pay the exporter against a warehouse receipt
D. the buyer still has to pay the exporter against the warehouse receipt because his designated vessel has arrived late at the point of loading
31. Drunken people have no......to sign a contract
A. Contractual capacity x
B. Contractual concept
C. Contractual government
D. Contractual branch
32. If the buyer comes from a country which has a poor reputation for enforcing awards, the best method of payment under the contract is a/an......
A. Revolving L/C
B. At sight confirmed L/C x
C. Deferred irrevocable L/C
D. Transferable L/C
33. In how many originals and copies is the air waybill issued according to the standard of the International Air Transport Association – IATA?
A. 3 originals and 3 copies
B. 3 originals and 6 copies
C. 3 originals and 9 copies x
D. It depends on the requirements in the letter of credit
34. Transfer of risk from the seller to the buyer (Incoterm 2000). DDU
A. When the goods are at the buyer’s premises x
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the goods are on board
35. Which of the following discrepancies is NOT the problem with Insurance?
A. documents are not presented within the required time x
B. the sum insured is below the figure required
C. the insurance risks are not those specified in the credit
D. a certificate of insurance is product while the credit calls for a policy
36. Inspection by......reveals discrepancies in quality
A. Custom officers
B. The carrier
C. The exporter
D. The importer x
37. A grace period is sometimes used to.......
A. Avoid penalty
B. Facilitate early delivery x
C. Avoid liquidated damages
38. In international contracts, parties try to exclude assignment of rights without......
A. Memorandum of understanding
B. Written consent of parties x
C. A letter of reference
D. A personal letter
39. There is no connection between the letter of credit and the sales contract. Right or wrong?
A. Completely right x
B. Completely wrong
C. It depends
D. The exporter and the buyer may agree that all the terms in their sales contract must be stated in the letter of credit
40. The dock workers in Port Verbena go on strike
A. Yes x
B. Questionable
C. No
41. Within the four alternatives of the at sight letter of credit, which one is the least satisfactory for the exporter?
A. Settlement by sight payment
B. Settlement by deferred payment
C. Settlement by acceptance
D. Settlement by negotiation x
42. .....is open-ended
A. Tailor-made
B. Floating
C. Open cover x
43. Which of the following statement is wrong?
A. The bank must check is the documents specified in the letter of credit are in perfect order
B. Sometimes, the bank may question the necessity or value of the documents x
C. The bank is not interested in the question of why the buyer wanted a particular document presented in a particular form
D. There are no rules as to what documents a letter of credit may or may not require
44. All of the following are objectives that the exporter tries to minimize the risk of the goods being rejected or of heavy defects liability claims EXCEPT
A. The quality specified
B. The confidence in the buyer
C. On-time delivery x
45. “A radio lacks the wires connecting the loudspeaker to the amplifier” is an example of
A. Defective design
B. Defective materials
C. Defective workmanship x
D. Misuse by the buyer
46. Of the three options available for settling disputes, litigation before the court is internationally least attractive as it is......
A. Expensive and legalistic x
B. Business-like and flexible
C. Time-saving and private
D. Fast and acceptable
47. A disclaimer of warranty often accompanies delivery of
A. Software x
B. Hardware
C. Footwear
D. Chinaware
48. In some legal systems, the buyer has the right.......duty to inspect delivered goods
A. And
B. Or
C. And/or
D. But x
49. Feeble-minded people lack.....to enter contracts
A. Money
B. Time
C. Contractual capacity x
D. Intelligence
50. In contracts, .....is not normally allowed
A. Delegation of duties x
B. Assignment of rights
C. Performance of obligations
D. Fulfillment of duties
ĐỀ 27
1. The things that the exporter should keep in mind in negotiating payment are....
A. Payment method, timing, place, delay and results of delay x
B. How payment will be made and the date of payment
C. Where the money must be before payments is considered complete and what delay in payment is excusable
D. Results of non-excusable delay in payment and time of payment
2. Under Anglo-American law, exporters have rights to...
A. Withdraw an offer x
B. Withdraw common law
C. Withdraw case law
D. Withdraw legal law
3. In international contracts, parties try to exclude assignment of rights without...
A. A memorandum of understanding
B. Written consent of parties x
C. A letter of reference
D. A personal letter
4. Failure to meet specifications is a:
A. Defect in workmanship
B. Defect in material
C. Defect in design x
D. Defect in quantity
5. In most guarantees, the bank agrees to pay "on first demand" which means....
A. Serious and objective conditions must be met by the beneficiary before claiming payment of the guarantee
B. With demur or objection
C. Without cavil and demur
D. Without demur or objection x
6. A contract is ultra vires is....
A. well enforceable
B. unenforceable x
C. valid
D. effective
7. A commercial invoice must be made out to
A. The exporter.
B. The shipper.
C. Any party endorsing the bill of lading.
D. The applicant for the letter of credit, normally to the buyer, unless otherwise stated in the credit. x
8. The best solution for the exporter to make late payment impossible is....
A. A typical contract clause in which there are regulations on the amount of interest the seller shall be entitiled to receive in case of late payment
B. An agreement with the buyer to strenthen the payment probisions with a payment guarantee
C. An agreement with an insurance company in case the buyer fails to pay on time
D. A confirmed, irrevocable, at sight letter or credit. x
9. Which of these is the cheapest option for the exporter
A. Repair x
B. Replace
C. Reduce the price
D. Return the goods
10. Which of the following is NOT the method of issuing the letter of credit?
A. By email x
B. By airmail
C. By mail
D. By teletransmission
11. Assuming shipment is by rail, what if a letter of credit demands the original bill of lading?
A. It is a possible demand
B. The original of the bill of lading for shipment by rail does not come into the possession of the buyer
C. Such a letter of credit is certain to cause delay in payment x
D. The bank insists on strict compliance
12. A ban is issued on the exporter of jute products by newly elected government
A. Yes
B. Questionable x
C. No
13. Transfer of risk from the seller to the buyer ( Incoterm 2000): CPT
A. When the goods are At the seller's premises
B. When the goods are handed to the first carrier x
C. When the goods across the ship's rail
D. When the goods are on board
14. The cheapest mode of transport is....
A. by sea x
B. by air
C. by road
15. The bank notifying the exporter that the letter of credit has been opened is called...
A. The issuing bank
B. The advising bank x
C. The confirming bank
D. The opening bank
16. Payment guarantee means...
A. bond
B. surely
C. warranty
D. A triangle relationship amongst guarantor, principal and beneficiary x
17. Two parties sign a contract
A. The contract is binding x
B. The contract is effective
C. The contract is binding and effective
18. The defect liability clause should state
A. the date of acceptance
B. exporter's duty if a defect comes to light
C. both A and B x
D. Only "A"
19. If the price is quoted CIF San Francisco, who pays for the insurance and freight
A. The exporter x
B. The buyer
C. The forwarding agent
D. The confirming bank
20. Within the four alternatives of the at-sight Letter of credit, which one is the least satisfactory for the exporter?
A. Settlement by sight payment
B. Settlement by deferred payment
C. Settlement by acceptance
D. Settlement by negotiation x
21. Termination for convenience occurs when one party simply decides to drop the contract and....
A. No reason is required x
B. Reasons are required
C. Consultation is required
D. Conversation is required
22. If the price is quoted CPT Vancouver, who pays for the freight
A. The exporter x
B. The forwarding agent
C. The buyer
D. The confirming bank
23. It is common to put the definition clause.... of the contract
A. at the beginning
B. near the beginning x
C. at the end
D. near the end
24. A contract requiring an exporter in Ethiopia to send the contract goods by air for delivery in Windhoek, Namibia
A. CIF Windhoek
B. CIP Windhoek x
C. DEQ Windhoek
25. The exporter's interest are best served by.....
A. An irrevocable letter of credit
B. A confirmed letter of credit
C. An at-sight letter of credit
D. A combination of all of the above x
26. In contracts,........ is not normally allowed
A. Delegation of duties x
B. Assignement of rights
C. Performance of obligations
D. Fulfillment of duties
27. Elderly people are... to deal with a contract
A. Unable
B. Able x
C. Impossible
D. Unaffordable
28. Export credit insurance which gives the exporter an acceptable level of payment shall be paid by....
A. The buyer
B. The exporter x
C. A bank
D. An insurance company
29. Transfer of risk from the seller to the buyer ( Incoterm 2000): FOB
A. When the goods are At the seller's premises
B. When the goods are handed to the first carrier
C. When the goods across the ship's rail x
D. When the goods are on board
30. How to make a bill of lading negotiable
A. Stamp the word "Negotiable" across the surface the bill of lading
B. In the Consignee box, do not write anything, just leave it blank
C. Make the bill of lading blank endorsed
D. Fill the words " to order" in the Consignee box x
31. The risk of rough handling is not covered under the cargo clause....
A. A
B. B
C. C
D. B and C x
32. ..... happens when one party ends the contract because of breach by the other
A. Cancellation x
B. Suspension
C. Impossibility
D. Termination
33. Which is the most appropriate method of payment for the exporter in the following case? A new small customer in a Pacific island republic much given to political distuebances. The order is for $10,000 worth of assorted textiles
A. Open account with no security
B. Open account with bank guarantee
C. Open account with export credit insurance
D. Confirmed letter of credit x
34. Feeble-minded people lack.... to enter contracts
A. money
B. time
C. contractual capacity x
D. intelligence
35. The decision of arbitrators is....
A. Law-oriented
B. Business-oriented x
C. Action-oriented
D. Reaction - oriented
36. the place of delivery is doubly important to the exporter because the date of....normally depends on time and place of delivery
A. Insurance
B. Payment x
C. Invoice
37. If the price is quoted CFR HaiPhong, who pays for the freight?
A. The buyer
B. The exporter x
C. The carrier
D. The forwarding agent
38. The word "cash" in international trade means.....
A. Coins and notes
B. Gold
C. Checks or bank transfers x
D. Prepayment
39. A warranty protects....
A. the exporter
B. the importer
C. neither the exporter nor the importer
D. both the exporter and the importer x
40. The defects liability period is also called
A. Warranty period x
B. Guarantee period
C. Correction action period
D. Legal action period
41. The bill of lading issued by the carrier for road transport is called....
A. Road bill of lading
B. Road bill
C. Roadway bill
D. Road consignment note x
42. Exporter prefer:
A. the return of the defective item to the replacement of it
B. the replacement of the defective item to the return of it x
C. the return of the goods and return of the price
D. none of these
43. Open package inspection is synonymous with:
A. Buyer's inspection x
B. Independent inspection
C. Customs inspection
D. Pre-delivery inspection
44. In a contract under a Continental law, a recital....
A. is essential
B. is important
C. is not useful
D. is useful x
45. The two terminologies which mean the same thing are.....
A. Guarantee and Warranty
B. Bond and Surety
C. Warranty and Defects Liability x
D. Guarantee and Insurance
46. If the price is quoted FCA, who pays for the freight
A. The exporter
B. The carrier
C. The buyer x
D. The forwarding agent
47. A warranty is aimed at:
A. Obtaining loans
B. Assurance of product performance x
C. Credit purchase
D. Profit making
48. According to the UCC, if the goods fail in any respect to conform to the contract, the buyer may....
A. reject the whole
B. accept the whole
C. accept any commercial unit and reject the rest
D. All the above x
49. A promise by the exporter to cure defects in his product is called
A. A product guarantee
B. A product warranty x
C. A product insurance
D. A product certification
50. Feeble-minded people are legally unable to..... contracts
A. Sign x
B. Decline
C. Refuse
D. Resign
ĐỀ 28
1. As the consequences of a defect can be expensive, the question of who pays the consequential loss or damage is often…
A. Agreeable
B. Controversial x
C. Non-negotiable
D. Amicable
2. In negotiating a letter of credit, the step in which the exporter rigorously check the documentation and submit it to the bank is…
A. Agreement
B. Verification
C. Specification
D. Compliance x
3. Among a number of international bodies offering arbitration service, the … in Paris is the most prestigious.
A. UCP
B. ADR
C. ICC x
D. FAO
4. In contracts, … is not normally allowed.
A. Delegation of duties x
B. Assignment of rights
C. Performance of obligation
D. Fulfillment of duties
5. If shipment is made on CIF or CIP terms, the letter of credit will call for…
A. An insurance policy
B. A letter of insurance
C. A certificate of insurance
D. Either A or C x
6. A warranty protects …
A. The exporter
B. The importer
C. Neither the exporter nor the importer
D. Both the exporter and the importer x
7. A well-designed set of specifications protects buyers against … product
A. Advanced
B. Dented
C. Inferior x
D. Superior
8. Why can a manufacturer sometimes accept a loss on an export deal?
A. He wants to win a regular customer
B. His factory may be short of work
C. He can get some export incentives from the government
D. Any of the above x
9. Who issues ocean bill of lading?
A. Captain
B. Exporter
C. Shipping company x
D. Agent
10. Transfer of risk from the seller to the buyer (Incoterm 2000): DDU
A. When the goods are at the buyer’s premises x
B. When the goods are handed to the first carrier
C. When the goods are across the ship’s rail
D. When the goods are on board
11. … discharge a contract when one party faces an excessive burden in complying with the contract
A. Suspension and non-performance
B. Frustration and impossibility x
C. Disruption and prevention
D. Suspension and acceptance
12. … is open-ended
A. Tailor-made
B. Floating
C. Open cover x
13. In contract negotiation, “an invitation to provide terms and condition” may mean…
A. Another name for acceptance
B. Another name for an offer
C. An invitation for the other party to make an offer x
D. An invitation to the other to accept an offer
14. A payment guarantee simply commits the bank if the buyer defaults. The payment guarantee is usually for … of the contract price.
A. 100% x
B. Less than 100%
C. 10%
D. Between 5% and 10 %
15. Inspection by … reveals discrepancies in quality
A. Customs officers
B. The carrier
C. The exporter
D. The importer x
16. An unilateral offer can be defined as…
A. An offer made of a promise in return for a promise
B. An offer made of a promise in return for an act x
C. An offer made of an act in return for an act
D. An offer made of an act in return for a promise
17. In negotiation a letter or credit, the step in which the list of all required documentations is incorporated in the contract is…
A. Specification
B. Incorporation x
C. Compliance
D. Verification
18. Transfer of risk from the seller to the buyer (incoterm 2000): CFR
A. When the goods are at the seller’s premises
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail x
D. When the goods are on board
19. Which of the following discrepancies is NOT the problem with the letter of credit?
A. The shipment was short
B. The shipment was late
C. There is no endorsement if endorsement is necessaryx
D. The credit has expired
20. “door to door” service is offered. Which term should be used?
A. DDP x
B. CIP
C. CIF
21. War risk is not included in …
A. A clause
B. B clause
C. A,B,C clause x
22. Under the public law, the company can only sign a contract …
A. Even when they lack power
B. That is beyond its power
C. Both a and b
D. That is within its power x
23. … can create no – contract situation
A. Only duress
B. Only fraud
C. Only mistake
D. Duress, fraud and mistake all x
24. The guarantor is usually a…
A. Bank
B. Insurance company
C. Both a and b x
D. Neither a nor b
25. In the box “with brief advice by teletransmission” is crossed, it means …
A. The exporter wants to be informed of the issuance of the LC by telex x
B. The exporter wants to begin preparation for delivery
C. The buyer’s responsibility of informing the exporter that the LC has been issued at his favor
D. The exporter wants to know about the issuance of the LC more quickly
26. Which of the following is NOT a discrepancy found with the commercial invoice?
A. The description of the good on the invoice does not conform to the description in the LC
B. The amount shown on the invoice is more than the amount permitted by the LC
C. The invoice is required to be certified or notarized by the LC does not state exactly the kind of certification made by whom
D. The documents required to be signed are not signed x
27. In international practice, problem of assignment of rights and delegation of duties can be reduced by using …
A. Prior written consent of the other party x
B. Prior conversation of the other party
C. Prior consultation of the other party
D. Prior talk to the other party
28. The first step in negotiating a LC is…
A. Incorporation
B. Specification
C. Agreement x
D. Verification
29. A grace period is sometimes used to …
A. Avoid penalty
B. Facilitate early delivery x
C. Avoid liquidated damages
30. Inspection of the goods by the buyer in the manufacturer’s factory is referred to as …
A. Inspection by inspection service
B. Pre-delivery inspection x
C. Post-delivery inspection
D. Customs inspection
31. The point at which money is deemed to be paid most preferred by buyer is …
A. When the buyer pays the money into his bank
B. When the buyer’s bank transfers fund
C. When the buyer instructs the bank to pay x
D. When the funds reach the seller’s bank account
32. Most contracts contain an assurance that the exporter will … any defects in his product
A. Make good x
B. Take away
C. Alter
D. Modify
33. All the following are objectives that the exporter tries to achieve to minimize the risk of the goods being rejected or heavy defects liability claims EXCEPT
A. The quality specified
B. The confidence in the buyer x
C. On-time delivery
34. The mechanism of a confirmed LC works as follow
A. Buyer instructs issuing bank to issue a LC in favor of the seller
B. Buyer instructs issuing bank to instruct an advising bank to pay under a LC in favor of the seller
C. Buyer instructs issuing bank to instruct a confirming bank to pay under a LC in favor of the seller x
D. Buyer instructs issuing bank to instruct a third bank to pay under a LC in favor of the seller
35. In a guarantee, a guarantor if often
A. The buyer
B. The seller
C. The bank x
D. The manufacturer
36. The entire agreement clause means that all documents that predicts the contract
A. Are still valid
B. Become important
C. Become invalid x
D. Can be used as evidence
37. The name of parties to contract are often on … of the contract
A. The 1st page x
B. The 2nd page
C. The last page
D. All pages
38. Why do few exporters ask for bank guarantees as security for payment?
A. Because they are not expensive to set up
B. Because they run into trouble so often x
C. Because they are conditional guarantees
D. Because LC is much preferred
39. “minimum coverage” is the so-called Cargo Clause …
A. A
B. B
C. C
40. If both parties perform their duties exactly according to the contract, the contract is …
A. Discharged by performance x
B. Discharged for performance
C. Discharged to performance
D. Discharged with performance
41. If a contract is the entire agreement, earlier letter and documents …
A. Can be used as evidence
B. Become invalid x
C. Prevail
D. Remain important
42. If the price is quoted CIP Vancouver, who pays for the freight?
A. The exporter x
B. The forwarding agent
C. The buyer
D. The confirming bank
43. In settlement by deferred payment, if the seller needs money immediately the what can he do?
A. There is no way he can get the money immediately
B. He can exchange the LC for cash with any agreeable bank x
C. The seller can realize some parts of the LC’s value, not its full value
D. Payment is still safe but it is delayed
44. In CIF and CIP contracts, the exporter normally assigns the insurance agreement to …
A. The buyer x
B. The carrier
C. The issuing bank
45. What is a transferable credit?
A. It is the kind of credit which allows the exporter to transfer his right as the credit ‘s beneficiary to any third party
B. It is the kind of credit which allows the 1st beneficiary to request the confirming bank to pay a third party x
C. It is the kind of negotiable document with which the exporter can endorse by any third party
D. It is the kind of credit with which the buyer will not necessarily know who is the actual supplier of the goods
46. The lump-sum compensation is set too high …
A. Liquidated damages
B. Quasi indemnity
C. Penalty x
47. … refer(s) to the questions of implied warranties.
A. Most contracts
B. Most laws x
C. The UCC
D. The Vienna State Convention
48. Which of the following method of payment is not possible?
A. 100& of the contract price by LC
B. 20% repayment and 80% by LC
C. 90% by LC and 10% retaining until the warrantee period is over
D. Part of the contract price is paid by LC but there is not a clear figure stated in the amount of the credit x
49. Transfer of risk from the seller to the buyer (Incoterm 2000): FAS
A. When the goods are ex-quay x
B. When the goods are handed to the 1st carrier
C. When the goods across the ship’s rail
D. When the goods are on board
50. In CIP and CIF contracts, ... must pay for insurance from the point of delivery to the named point of arrival
A. The exporter x
B. The importer
C. The carrier
ĐỀ 29
1. Agreement, under Anglo-American law, are of_________
A. 2 types x
B. 3
C. 4
D. 5
2. Another name for warranty is ________
A. Guarantee
B. Defect liability x
C. Legal responsibility
D. Warrantee
3. “Door to door service” is offered. Which term should be used?
A. DDP x
B. CIP
C. CIF
4. The things that the exporter should keep in mind in negotiating payment are
A. Payment mode, timing, place, delay and results of delay x
B. How payment will be made and the date of payment
C. Where the money must be before payment is considered complete and what delay in payment is excusable
D. Results of non-excusable delay in payment and time of payment
5. Of the 3 options available for setting disputes, litigation before the court is internationally least attractive as it is___
A. Expensive and legalistic x
B. Biz-like and flexible
C. Time-saving and private
D. Fast and acceptable
6. The clause covers General Average
A. A
B. B
C. A, B, C x
7. Transfer of risk from the seller to the buyer (Incoterm 2000): FAS
A. When the goods are ex-quay x
B. When the goods are handed to the first carrier
C. When the goods across the ship’s rail
D. When the goods are on board
8. Most contracts contain an assurance that the exporter will___ any defects in his products
A. Make good x
B. Take away
C. Alter
D. Modify
9. Which of these does not count as a defect?
A. Defective design
B. Misuse x
C. Defective materials
D. Defective workmanship
10. The background of the contract is provided in the form of ____
A. A clause
B. A definition
C. The annex
D. A whereas-recital x
11. A bank guarantee which gives the exporter an acceptable level of security in terms of payment shall be paid by
A. The buyer x
B. The exporter
C. A bank
D. A 3rd party
12. Which of the following is the least desirable option for the exporter?
A. Allow the buyer to repair at the exporter’s cost
B. Reduce the price
C. Return the goods and refund the price x
D. Replace the defective items
13. “The buyer shall notify the Seller of defects without undue delay”. This is the example of
A. Defects liability period
A. Defects liability period
B. Notification period x
C. Rectification period
D. Legal action period
14. The contract should regulate what happens if Incoterm 2000 and the terms of the contract conflict: Normally the ____ prevailes
A. Incoterm
B. Contract x
C. Incoterm and contract
15. A marine bill of lading can be negotiable document with which___
A. The buyer can use it to resell the goods during shipment x
B. The exporter can use it to resell the goods during shipment
C. The issuing bank can use it to resell the goods to another customer
D. The buyer can use it to negotiate a price with the negotiating bank
16. As soon as the exporter receives advice that the LC has been opened, what should he do?
A. He should check that it complies with the agreement he negotiated with the buyer x
B. HE should check if there is any documents that he does not understand
C. He should check if there is any requirement that he does not agree to
D. He should check if there is any necessary amendment to the terms of the LC
17. With a well-designed set of specification, the seller can protect its____ and avoid costs
A. Reputation x
B. Production
C. Resolution
D. Profitability
18. Unless otherwise agreed, the insurance is “minimum cover”- cargo clause_____
A. A
B. B
C. C x
19. Why LCs are formally called “documentary credits”?
A. Because a LC is a binding agreement by a bank to pay a certain sum of money when the exporter presents the necessary documents to the bank
B. Because the LC is issued by an issuing bank at the request of the buyer
C. Because in a LC situation, documents are exchanged for money x
D. Because the documents in a LC are proofs of trust
20. The answer to background question are written ______
A. Through the whereas-recital (giốngcâu 10)
21. A disclaimer of warranty often accompanies delivery of
A. A software x
B. Hardware
C. Footwear
D. Chinaware
22. Continental Law copes with_____
A. Personal problems
B. International trade
C. National issues x
D. Individual conflicts
23. In which situation should exporters use export credit insurance?
A. Long-term customers
B. Transactions represent a high proportion of their turnover x
C. Buyers are willing to spend money on a payment guarantee
D. In a seller’s market
24. What would be the effect on the price of the goods traded if the buyer wants the goods sooner?
A. The price of the goods will go up
B. The price of the goods will go down
C. There is no chance in price
D. The price of the goods will go up extra costs involved due to extra working shift from the manufacturer x
25. “The seller shall make good the defect or damage as soon as practicable and at his own cost”
A. Legal action period
B. Notification period
C. Rectification period x
D. Defect liability period
26. Whereas-clauses____
A. Are provisions
B. Are promises
C. Are conditions
D. Are not provisions, promises or conditionsx
27. The bank notifying the exporter that the LC has been opened is called____
A. The issuing bank
B. The advising bank x
C. The confirming bank
D. The opening bank
28. Which of the following is not the reason why the exporter prefers a longer expiry period of credit?
A. He wants to save bank charges
B. He wants enough time after delivery to present the documents
C. He wants to have enough time to correct any discrepancies that might be discovered by the bank
D. He wants to spare some time for any unexpected things preventing his presentation of documents on time
29. A contract requiring the exporter to send the contract goods by road from Kenya to Zambia with freight paid by the exporter
A. CFA Lusaka
B. CPT Lusaka x
C. CFR Nairobi
30. The exporter should have no liability for the goods when they are_____
A. Beyond his control x
B. In his control
C. Under his control
31. Which of the following examples is a patent defect?
A. Crushed or stained garments x
B. The flooring shows signs of deterioration
C. High fuel consumption
D. Inadequately tightened nuts and bolts
32. Bill of lading is the most important document because it is a _____
A. Document of title x
B. Document of negotiation
C. Document of freight
33. Which of the following is not considered to be special requirement in a sale/purchase contract?
A. Containers are required to be fumigated before shipment
B. Upgraded packing materials
C. Goods must be packed according to export standards x
D. Health inspection for foodstuffs
34. If a dispute arises, the recital allows the court to discover the real meaning of ____
A. The contract x
B. The term
C. The incoterm
D. The appendix
35. Why can a manufacturer sometimes accept a loss on an export deal?
A. He wants to win a regular customer
B. His factory may be short of work
C. He can get some export incentives from the Gov
D. All of the above x
36. “ A machine that consumes more fuel than specification” is an example of
A. Latent defect x
B. Patent defect
C. Inherent defect
D. Apparent defect
37. Continental law is based on a ______
A. Case law
B. Common law
C. Legal code x
D. Legal system
38. Transfer of risk from the seller to the buyer: CIF
A. When the goods are at the seller’s premises
B. When the goods are handed to the 1stcarrier
C. When the goods across the ship’s rail x
D. When the goods are on board
39. Which of the following discrepancies is not the prob with the LC?
A. The shipment was short
B. The shipment was late
C. There is no endorsement if endorsement is necessary x
D. The credit has expired
40. In a contract under a continental law, a recital _____
A. Is essential
B. Is not useful
C. Is not essential x
D. Is important
41. Assuming shipment is by rail, what if a LC demands the original bill of lading?
A. It is a possible demand
B. The original of the BL for shipment by rail doesn’t come into possessions of the buyer
C. Such a LC is certain to cause delay in payment x
D. The bank insists on strict compliance
42. _____________ is 2-sided procedures
A. Termination
B. Cancellation
C. Rescission x
D. Suspension
43. A volcanic eruption buries the factory in ash (force majeure)
A. Yes x
B. Questionable
C. No
44. If the force majeure event continues for too long, both parties have the right to
a. Continue the contract
b. Terminate the contract x
c. Make late delivery
45. What if a LC calls for a complete set of original air waybills?
A. The exporter has to present the full set of original air waybills if he wants to get payment from the bank
B. The exporter cannot provide the complete set
C. This is obviously a mistake
D. Only the 2nd original of the air waybill goes to the consignee. The bank, however, will follow the wording of the LC exactly and refuse an incomplete set waybills x
46. Export credit insurance is very attractive, however, has certain limitations like
A. High premiums paid by the Ex
B. Long time waiting for compensation from the insurance company
C. Long time since the buyer fails to pay up to the time the insurance company compensates the Ex and the inability of covering 100% of the original invoice pricex
D. Refusal from the insurance company to quote premiums due to risky biz of the buyer’s non-creditworthiness
47. Anglo-American law brings the ____ in the individual case
A. Justice x
B. Uniformity
C. Consistency
D. Legacy
48. Another name for tender guarantee is _____
A. Revocation guarantee
B. Bid guarantee
C. Bond guarantee
D. Bid bond x
49. Full set on board ocean Bills of lading to order shipper, blank endorsed. In this clause shipper means____
A. Exporter
B. Importer
C. Bank
D. A, B, C. It depends on the situation x
50. Full set on board ocean Bills of lading to order shipper, blank endorsed. In this clause shipper means____
E. Exporter
F. Importer
G. Bank
H. A, B, C. It depends on the situation x
ĐỀ 30
1. Defects that come to light after buyer’s acceptance are called:
A. Patent defects
B. Latent defects x
C. Coherent defects
D. Apparent defects
2. A commercial invoice must be made out to:
A. The exporter
B. The shipper
C. Any party endorsing the bill of lading
D. The applicant of the letter of credit, normally to the buyer, unless otherwise stated in the credit x
3. Delivery of the goods under the most export contracts take place in a country of :
A. The importer
B. The exporter x
C. The agent
4. If the price is quoted EXW, who pays for freight?
A. The exporter
B. The buyer x
C. The forwarding agent
D. The advising bank
5. In settlement by acceptance, the kind of bill of exchange being sent together with other documents to the accepting bank is …
A. Sight draft
B. Short-term draft
C. Time draft x
D. Long-term draft
6. A inspection by the buyer is called:
A. Independent inspection
B. Inspection of goods prior to shipment
C. Open package inspection x
D. Customs inspection
7. In settlement by deferred payment, if the seller needs money immediately, what can he do?
A. There is no way he can get money immediately
B. He can exchange the letter of credit for cash with any agreeable bank x
C. The seller can realize some part of the letter of credit’s value, not full value
D. Payment is still safe but is delayed
8. A ban is issued on the export of jute products by newly elected government that has been preparing legislation on this subject of five years
(Note: If either party is prevented from, or delayed in performing any duty under this Contract by an event beyond his reasonable control, then this event shall be deemed force majeure)
A. Yes x
B. Questionable
9. The force majeure clause suggested by the International Chamber of Commerce, for example, states that payment of interest on overdue sums payable to the seller is ….. by…..
A. Excused/ force majeure
B. Not excused/ force majeure x
C. Excused/ Acts of God
D. Excused/ contingencies
10. If the shipment is under Incoterm other than CIF or CIP,…
A. The buyer has to arrange the Insurance cover by himself.
B. The buyer may still ask the exporter to arrange some aspects of insurance for him.
C. The exporter has to arrange the Insurance cover for the goods
D. The exporter pays for insurance till the port of discharge. x
11. The bill of lading is issued by the carrier for combined transport is called
A. Combined bill of lading
B. Combined bill
C. Combined transportation bill of lading
D. Combined transport bill of lading x
12. Which the following is NOT the reason why the exporter prefers a longer expiry period of credit?
A. He wants to save bank charges x
B. He wants enough time after delivery to present the document
C. He wants to have enough time to correct any discrepancies that might be discovered by the bank
D. He wants to spare some times for any unexpected things preventing his presentation of documents on time.
13. In drafting an arbitration clause, the following question must be resolved:
A. How many arbitrators sit in the court?
B. What is the language of court?
C. Where is the place of court?
D. All of above x
14. Which type bill of lading is negotiable?
A. Surrender
B. Straight
C. To order x
15. Export credit insurance is very attractive; however, it has certain limitations like …
A. High premium paid by the exporter
B. Long time waiting for compensation from the insurance company
C. Long time since the buyer fails to pay up to the time the insurance company compensates the exporter and the inability of covering 100% of the original invoice price. x
D. Refusal from the insurance company to quote premiums due to risky business or the buyer’s non- creditworthiness.
16. In settlement by sight payment,…
A. The sellers present the necessary documents to the issuing bank
B. The sellers present the necessary documents to the advising bank
C. The sellers presents the necessary documents to the paying bank x
D. The sellers presents the necessary documents to the reconfirming bank
17. A machine that consumes more fuel than specification is example of:
A. Latent defect x
B. Patent defect
C. Coherent defect
D. Apparent defect
18. In a disputes arise, the recital allows the court to discover the real meaning of…
A. The contract x
B. The term
C. The incoterm
D. The appendix
19. Transfer of risk from the seller to the buyer (Incoterm 2000) : CIP
A. When the goods are at the seller’s premises
B. When the goods are handed to the first carrier x
C. When the goods across the ship’s rail
D. When the goods are on board
20. Is there any “reconfirming bank” ?
A. No, there isn’t
B. Yes. There is one in case banks are reluctant to confirm letter of credit, especially those from obscure banksx
C. Never is there
D. It depends
21. The Disclaimer of warranty means:
A. The seller is liable for goods
B. The buyer is denied of some of his normal rights x
C. The seller will make good any defect
D. Contract price would be far higher
22. The incoterm …. Contains 11 items
A. 1990
B. 2000
C. 2010 x
23. Where is the often place of expiry of the credit?
A. At the courters of the issuing bank
B. At the courters of the advising bank
C. At the courters of the confirming bank x
D. At the courters of negotiating bank
24. Once the bank has indicated the discrepancies, what can the exporter do?
A. The exporter can provide the missing paperwork or correct errors x
B. The exporter can ask the buyer to instruct the bank to change the terms of the letter of credit
C. The exporter can ask the bank to process the letter of credit with the discrepancies but to pay only when ( and if) the issuing bank permits payment
D. Any of the above
25. Beside the commercial invoice, he transport document and insurance document , what do “Other documents” include?
A. A certificate of origin
B. A certificate of inspection
C. A health inspection
D. Any of the above x
26. The answer for background questions are written:
A. Through the whereas-recital x
B. Through the annex
C. Through provisions
D. Through conditions
27. Which of the following is essential to successful business?
A. Quality
B. Customer satisfaction x
C. Correct making and packaging
D. On-time delivery
28. When the bill of lading marked “freight collected”. Who pays for freight?
A. The buyer x
B. The seller
C. The agent
D. It depends on the agreement
29. The “exporter’s wording” and the “Buyer’s wording” in the defect liability provision represent:
A. A major contract issue x
B. A minor contract issue
C. Nonsense
D. Profit and loss of each party
30. The place of delivery is doubly important to the exporter because the date of…. Normally depends on time and place of delivery.
A. Insurance
B. Payment x
C. Invoice
31. Within the four alternatives of the at-sight letter of credit, which of one is the least satisfactory for the exporter?
A. Settlement by sight payment
B. Settlement by deferred payment
C. Settlement by acceptance
D. Settlement by negotiation x
32. Title of the goods passes ……
A. With risks x
B. Without risks
C. With documents
33. Elderly people are …….. to deal with a contract.
A. Unable
B. Able x
C. Impossible
D. Unaffordable
34. The word “cash” in international trade means….
A. Coins and notes
B. Gold
C. Checks and bank transfers x
D. Prepayment
35. Continental law is based on a ….
A. Case law
B. Common law
C. Legal code x
D. Legal system
36. The background of contract is provided in the form of …
A. The clause
B. The definition
C. The annex
D. A whereas-recital x
37. The hereinafter called wording can prevent legal problem cause by :……
A. Misspelling names
B. Mistyping names x
C. Misreading names
D. Misaccepting names
38. A bank guarantee which gives the exporter an acceptable level of security in term of payment shall be paid by….
A. The buyer x
B. The exporter
C. A bank
D. A third party
39. “The Buyer shall notify the Seller of defects without undue delay”. This is example of:
A. Defect liability period
B. Notification period x
C. Rectification period
D. Legal action period
40. …………...happens when one party ends the contract because of breach by the other.
A. Cancellation x
B. Suspension
C. Impossibility
D. Termination
41. In principle, the buyer and reject delivered goods if they do not conform to the contract. This is called…….
A. Implied warranty of suitability
B. Implied warranty of conformity x
C. Implied warranty of merchantability
D. Implied warranty of fitness for intended purpose
42. The goods become deteriorated as a result of normal use. This process is called:
A. Fair play
B. Fair wear and tear x
C. Faults not present on delivery
D. Farewell
43. The greatest fear for the exporter is :
A. Being unable to meet the delivery deadline
B. Being unable to meet the specification of the goods
C. Being unable to get paid for the goods sold x
D. Having no guarantee for payment
44. Transfer of risks from the seller to the buyer ( Incoterm 2000) : CPT
A. When the goods are at seller’s premises
B. When the goods are handed to the first carrier x
C. When the goods across the ship’s rail
D. When the goods are on board
45. Which of the following concepts is best used to avoid confusion when we mean an assurance that the exporter will make the goods defects in his goods?
A. Warranty
B. Guarantee
C. Defects liability x
D. Warrantee
46. Why do most exporters offer a discount for early payment, for example 1% discount if payment is made within 10 days of the date of invoice?
A. Because the discount is so attractive to the buyer
B. Because the buyer can save on the invoice price
C. Because the exporter can substantially improve his cash flow x
D. Because the exporter just wants to get payment on delivery
47. The court of arbitration applies whatever ………….. the parties stipulate in the contract
A. International law
B. Corporate law
C. National law x
D. Business law
48. ………….. is two-sided procedures
A. Termination
B. Cancellation
C. Rescission x
D. Suspension
49. A contract that is ultra vires is…………
A. Well enforceable
B. Unenforceable x
C. Valid
D. Effective
50. The name of parties to the contract are often on ………..of the contract
A. The first page x
B. The second page
C. The last page
D. All pages
