Question 1

The trade terms "FOB" and "CIF" are defined by which of the following:

Accepted Answer

A)   Incoterms .
B)   Uniform Commercial Code.
C)   The Revised American Foreign Trade Definitions.
D)   All of the above. A

Question 2

Seller in Georgia and buyer in the Netherlands enter into a contract for the sale of goods, CIF port of Amsterdam. The seller refused to ship. The buyer brings an action for damages. In the United States, a court would probably rule that:

Accepted Answer

A)   the seller was correct in not shipping until payment was received.
B)   the damages should be measured by the difference between the contract price and the market price of the goods at the port of shipment.
C)   the damages should be measured by the difference between the contract price and the market price of the goods in Amsterdam at the time the documents would have been presented to the buyer for payment.
D)   none of the above.

Question 3

Another term in lieu for a negotiable bill of lading is a documentary draft.

Accepted Answer

A) True 
 B)False

Question 4

International commercial terms are used in all international contracts for the sale of goods.

Accepted Answer

A) True 
 B)False

Question 5

According to Incoterms , the risk of loss or damage to goods under a CIF contract passes from seller to buyer when:

Accepted Answer

A)   the goods cross the ship's rail at the port of shipment.
B)   the goods are unloaded at the port of destination.
C)   title to the goods passes to the seller.
D)   the goods leave the seller's place of business.

Question 6

Which of the following documents are always required in a documentary collection for the sale of goods?

Accepted Answer

A)   The draft, invoice, and bill of lading
B)   The invoice, bill of lading, and delivery order
C)   The certificate of origin, insurance policy, and invoice
D)   The draft, insurance policy, and invoice

Question 7

Bills of lading are meant to be:

Accepted Answer

A)   Substitutes for money.
B)   a means of transferring goods to buyers.
C)   sight drafts.
D)   guarantees for payment of the goods.

Question 8

A sale made "CIF foreign port" implies that the terms of the sale are:

Accepted Answer

A)   credit in foreign currency.
B)   cash against documents.
C)   credit against documents.
D)   settlement pending approval of goods.

Question 9

The documentary letter of credit transaction serves as a means to assure the buyer and seller that the transaction is secured.

Accepted Answer

A) True 
 B)False

Question 10

The type of bill of lading not recommended for the shipment of perishable goods is:

Accepted Answer

A)   a received-for-shipment bill of lading.
B)   an on-board bill of lading.
C)   a negotiable bill of lading.
D)   a straight bill of lading.

Question 11

In the U.S., the use of bills of lading is governed by:

Accepted Answer

A)   Federal Bills of Lading Act.
B)   The Convention on Contracts for the International Sale of Goods.
C)   Incoterms .
D)   none of the above.

Question 12

The difference between terms "CFR" and "CIF" is that under "CIF" term of sale, the buyer must procure his own marine insurance coverage on the goods.

Accepted Answer

A) True 
 B)False

Question 13

When goods are to be transported by more than one mode of transportation, the transportation is:

Accepted Answer

A)   unimodal.
B)   FAS
C)   DAS
D)   multimodal.

Question 14

Prepare an invoice that contemplates any number of the following: ocean freight and insurance costs, ground transportation costs, port charges, customs fees, forwarder's fees, and communications expenses.

Accepted Answer

To prepare an invoice that contemplates ...

Question 15

Compare and contrast the circumstances under which a buyer would and would not accept "E"-term contracts.

Accepted Answer

"Compare and contrast the circumstances under which a buyer would and would not accept "E"-term contracts."

A buyer would accept an "E"-term contract when they are looking for a hassle-free and convenient purchasing process. With an "E"-term contract, the buyer can complete the transaction online, without the need for physical paperwork or in-person meetings. This is especially beneficial for buyers who are located in different geographical locations from the seller, as it saves time and money on travel expenses.

Additionally, buyers may accept "E"-term contracts when they prioritize speed and efficiency in their transactions. Electronic contracts can be signed and executed much more quickly than traditional paper contracts, allowing the buyer to finalize the deal and receive their goods or services in a timely manner.

On the other hand, a buyer may not accept an "E"-term contract if they have concerns about the security and authenticity of electronic signatures and documents. Some buyers may feel more comfortable with the traditional process of physically signing and exchanging paper contracts, as it provides a tangible and verifiable record of the transaction.

Furthermore, buyers may be hesitant to accept "E"-term contracts if they are dealing with high-value or complex transactions that require thorough review and negotiation. In such cases, buyers may prefer the transparency and clarity of a traditional contract negotiation process, where they can discuss terms face-to-face with the seller and make revisions as needed.

In summary, the decision to accept or reject an "E"-term contract depends on the buyer's priorities regarding convenience, speed, security, and the nature of the transaction at hand.

Question 16

The government of Venezuela is purchasing a large quantity of American beans to be loaded on its own ship at the port of New Orleans. The buyer will arrange to have its vessel loaded and will obtain its own export licenses. The seller may be asked to quote its prices:

Accepted Answer

A)   FOB New Orleans.
B)   CIF Venezuela.
C)   FAS Venezuelan vessel.
D)   DEQ Venezuelan port.
E)   None of the above.

Question 17

The Incoterms definitions will automatically become a part of a contract for the sale of goods, governed by the UN Convention for the International Sale of Goods.

Accepted Answer

A) True 
 B)False

Question 18

Compare and contrast the risk of loss and expenses associated with "C" and "F" terms.

Accepted Answer

The risk of loss and expenses associated with "C" and "F" terms in international trade refer to the different responsibilities and liabilities of the buyer and seller.

Under "C" terms, such as CIF (Cost, Insurance, and Freight) or CIP (Carriage and Insurance Paid to), the seller is responsible for arranging and paying for transportation and insurance of the goods to the named destination. The risk of loss or damage to the goods transfers from the seller to the buyer when the goods are handed over to the carrier. The seller also bears the expenses of transportation and insurance, providing more security for the buyer in terms of risk and cost.

On the other hand, under "F" terms, such as FOB (Free on Board) or FCA (Free Carrier), the seller is responsible for delivering the goods to a named location, often a port or a carrier's facility. However, the risk of loss or damage to the goods transfers from the seller to the buyer when the goods are loaded onto the vessel or carrier. The buyer bears the expenses of transportation and insurance from that point onward. This places more risk and cost burden on the buyer compared to "C" terms.

In summary, under "C" terms, the seller bears more risk and expenses associated with transportation and insurance, providing more security for the buyer. Under "F" terms, the risk and expenses shift to the buyer earlier in the shipping process. It is important for both parties to clearly understand these differences and negotiate the terms of sale accordingly to mitigate potential losses and expenses.

Question 19

In an international transaction, the seller risk is called "credit risk" and the buyer's risk is called "delivery risk."

Accepted Answer

A) True 
 B)False

Question 20

The St. Paul Guardian Ins. v. Neuromed Systems case held that international commercial terms were defined according to the Uniform Commercial Code.

Accepted Answer

A) True 
 B)False

Exam 5: The Documentary Sale and Terms of Trade

The trade terms "FOB" and "CIF" are defined by which of the following:

Correct Answer
verified
A

Seller in Georgia and buyer in the Netherlands enter into a contract for the sale of goods, CIF port of Amsterdam. The seller refused to ship. The buyer brings an action for damages. In the United States, a court would probably rule that:

Correct Answer
verified

Another term in lieu for a negotiable bill of lading is a documentary draft.

Correct Answer
verified

International commercial terms are used in all international contracts for the sale of goods.

Correct Answer
verified

According to Incoterms , the risk of loss or damage to goods under a CIF contract passes from seller to buyer when:

Correct Answer
verified

Which of the following documents are always required in a documentary collection for the sale of goods?

Correct Answer
verified

Bills of lading are meant to be:

Correct Answer
verified

A sale made "CIF foreign port" implies that the terms of the sale are:

Correct Answer
verified

The documentary letter of credit transaction serves as a means to assure the buyer and seller that the transaction is secured.

Correct Answer
verified

The type of bill of lading not recommended for the shipment of perishable goods is:

Correct Answer
verified

In the U.S., the use of bills of lading is governed by:

Correct Answer
verified

The difference between terms "CFR" and "CIF" is that under "CIF" term of sale, the buyer must procure his own marine insurance coverage on the goods.

Correct Answer
verified

When goods are to be transported by more than one mode of transportation, the transportation is:

Correct Answer
verified

Prepare an invoice that contemplates any number of the following: ocean freight and insurance costs, ground transportation costs, port charges, customs fees, forwarder's fees, and communications expenses.

Correct Answer
Answered by ExamLex AI
To prepare an invoice that contemplates ...
View Answer

Compare and contrast the circumstances under which a buyer would and would not accept "E"-term contracts.

The government of Venezuela is purchasing a large quantity of American beans to be loaded on its own ship at the port of New Orleans. The buyer will arrange to have its vessel loaded and will obtain its own export licenses. The seller may be asked to quote its prices:

Correct Answer
verified

The Incoterms definitions will automatically become a part of a contract for the sale of goods, governed by the UN Convention for the International Sale of Goods.

Correct Answer
verified

Compare and contrast the risk of loss and expenses associated with "C" and "F" terms.

In an international transaction, the seller risk is called "credit risk" and the buyer's risk is called "delivery risk."

Correct Answer
verified

The St. Paul Guardian Ins. v. Neuromed Systems case held that international commercial terms were defined according to the Uniform Commercial Code.

Correct Answer
verified

Exam 5: The Documentary Sale and Terms of Trade

The trade terms "FOB" and "CIF" are defined by which of the following:

Correct AnswerverifiedA

Seller in Georgia and buyer in the Netherlands enter into a contract for the sale of goods, CIF port of Amsterdam. The seller refused to ship. The buyer brings an action for damages. In the United States, a court would probably rule that:

Correct AnswerverifiedShow Answer

Another term in lieu for a negotiable bill of lading is a documentary draft.

Correct AnswerverifiedShow Answer

International commercial terms are used in all international contracts for the sale of goods.

Correct AnswerverifiedShow Answer

According to Incoterms , the risk of loss or damage to goods under a CIF contract passes from seller to buyer when:

Correct AnswerverifiedShow Answer

Which of the following documents are always required in a documentary collection for the sale of goods?

Correct AnswerverifiedShow Answer

Bills of lading are meant to be:

Correct AnswerverifiedShow Answer

A sale made "CIF foreign port" implies that the terms of the sale are:

Correct AnswerverifiedShow Answer

The documentary letter of credit transaction serves as a means to assure the buyer and seller that the transaction is secured.

Correct AnswerverifiedShow Answer

The type of bill of lading not recommended for the shipment of perishable goods is:

Correct AnswerverifiedShow Answer

In the U.S., the use of bills of lading is governed by:

Correct AnswerverifiedShow Answer

The difference between terms "CFR" and "CIF" is that under "CIF" term of sale, the buyer must procure his own marine insurance coverage on the goods.

Correct AnswerverifiedShow Answer

When goods are to be transported by more than one mode of transportation, the transportation is:

Correct AnswerverifiedShow Answer

Prepare an invoice that contemplates any number of the following: ocean freight and insurance costs, ground transportation costs, port charges, customs fees, forwarder's fees, and communications expenses.

Correct AnswerAnswered by ExamLex AITo prepare an invoice that contemplates ...View AnswerShow Answer

Compare and contrast the circumstances under which a buyer would and would not accept "E"-term contracts.

The government of Venezuela is purchasing a large quantity of American beans to be loaded on its own ship at the port of New Orleans. The buyer will arrange to have its vessel loaded and will obtain its own export licenses. The seller may be asked to quote its prices:

Correct AnswerverifiedShow Answer

The Incoterms definitions will automatically become a part of a contract for the sale of goods, governed by the UN Convention for the International Sale of Goods.

Correct AnswerverifiedShow Answer

Compare and contrast the risk of loss and expenses associated with "C" and "F" terms.

In an international transaction, the seller risk is called "credit risk" and the buyer's risk is called "delivery risk."

Correct AnswerverifiedShow Answer

The St. Paul Guardian Ins. v. Neuromed Systems case held that international commercial terms were defined according to the Uniform Commercial Code.

Correct AnswerverifiedShow Answer

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
To prepare an invoice that contemplates ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified