Trắc nghiệm TACN 2

S 1
1. In settlement by deferred payment (thanh ton tr chm) , 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 day
2.Which of these counts as a defect?
A. Wrong design
B. Fair wear and tear
C. Misuse
D. Missing items
3. (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)
Shortage of supplies (background, the exporter cannot get the raw jute he need from
the supplier because of a shipping delay)
A. Yes
B. Questionable
C. No
4.The majority of shipping documents presented to banks under documentary credit
transaction are accepted on first presentation, Right or wrong
A. Completely right
B. Definitely wrong
C. Neither right nor wrong
D. It depends
5. A warranty is aimed at:
A. Obtaining loans
B. Assurance of product performance

C. Credit purchase
D. Profit making
6.The Anglo-American contract is
A. Not the entire agreement
B. Traditionally the entire agreement
C. Sometimes the entire agreement
D. Rarely the entire agreement
7.In negotiating a letter of credit, the step in which the list of all required documentation
is incorporated into the contract is
A. Specification (speccifying) ghi r
B. Incorporation
C. Compliance( submit) thc thi
D. Verification (check) r sot
8. In a contract under a Continental law, a recital
A. Is essential
B. Is important
C. Is not useful
D. Is useful
9.Minimum Coverage is the so-called Cargo Clause..p64
A. A
B. B
C. C
10. How many timing problems are involved in Defects Liability Period? P134
A. Three
B. Four
C. Two
D. Five
11. The main difference between Continent and Anglo American contract law is the
degree of..
A. Codification( b lut)
B. Formation
C. Automation
D. Interpretation
12. 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 form the advising bank to the exporter are always made with recourse. The
exporter has to pay back the advising bank in such a case
D. It is the responsibility of the issuing bank of paying back the advising bank in suck in
case
13. What can protect both the exporter and the importer in an export contract?
A. A well-designed set of specifications
B. An itemized set of specification
C. A plain set of specification
D. None of these
14. Which of the following is the objective aimed at by the exporter to minimize the risk
of the goods being rejected of heavy defects liability claims?
A. Winning buyers goodwill
B. Keeping his promise
C. Negotiating detailed specifications
D. Making profit
15. Transfer of risk form the seller to the buyer (Incoterm 2000) CIP
A. When the goods are at the sellers premises
B. When the goods are handed to the first carrier
C. When the goods across the ships rail
D. When the goods are on board
16. The name 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
17. In a contract under a Continental law, a recital..
A. Is essential
B. Is not useful
C. Is not essential
D. Is important
18.. is opened-ended
A. Tailor-made
B. Floating
C. Open cover
19. The mechanism of a confirmed letter of credit works as follows:
A. Buyer instructs issuing bank to issue a letter of credit in favor of the seller
B. Buyer instructs issuing bank to instruct an advising bank to pay under a letter of credit in
favor of the seller
C. Buyer instructs issuing bank to instruct a confirming bank to pay under a letter of
credit in favor of the seller
D. Buyer instructs issuing bank to instruct any third bank to under letter of credit in favor of
the seller
20.In CIF and CIP contracts, the exporter normally assigns the insurance agreement
to
A. The buyer
B. The carrier
C. The issuing bank
21. 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
C. Implied warranty of merchantability
D. Implied warranty of fitness for intended purpose
22. A contract is not enforceable if.
A. It is signed within power
B. It has a legal purpose
C. It has an illegal purpose
D. It has no purpose
23. The Disclaimer of warranty means:
A. The seller is liable for the goods
B. The buyer is denied of some of his normal rights
C. The seller will make good any defect
D. Contract prices would be far higher
24. 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
25. 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
26.The two terminologies which mean the same thing are.
A. Guarantee and Warranty
B. Bond and Surety
C. Warranty and Defects Liability
D. Guarantee and Insurance
27. Normally, risks are transferred at the point of
A. Delivery
B. Payment
C. Arrival
28. War risk is not included in..
A. A clause
B. B Clause
C. A,B,C clause
29. Negotiation of specification between the exporter and the importer can be
A. An effortless process
B. A difficult process
C. Done by an intermediary
D. A simple process
30. Why do the exporters offer a discount for early payment , for example a 1% discount
of payment is made within 10 days of the date of invoice ?
A. Because the discount is so attractive to the buyers
B. Because the buyer can save on the invoice price
C. Because the exporter can substantially improve his cash flow

D. Because the exporter just want to get payment for delivery
31. The method of payment which is dangerous for the exporter is:
A. Cash on delivery
B. Accepting a personal check
C. Prepayment
D. Export credit insurance
32. AS for Ango-American ,the decision of judge is always :
A. Predictable
B. Forceable
C. Unpredictable
D. Estimated
33. If both parties perform their duties correctly, a contract is discharged by :
A. Default
B. Suspension
C. Performance
D. Breach
34. Dawson bought vanilla beans from Indonesia. Dawson instructed an American bank
to open a letter of credit. One of 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 one
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 could not
D. No question, it could
35.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 confirm
36. The bill of lading 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
37.In a contract the word whereas means :
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
A.
B.
C.
only that
while
when
because or consider that
38. Assuming shipment is by rail, what if a letter of credit demands the original bill of
lading ?
It is possible demand
The original of the bill of lading for shipment by rail does not come into the possession of
the buyer.
Such a letter of credit is certain to cause delay in payment
The bank insists on strict compliance
40. 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 tailors shop with
whom you have done business for 20 years.
Confirmed letter of credit.
Open account with no security
Open account with bank guarantee
Open account with export credit insurance
41. IF shipment is under Incoterms other than CIF or CIP ?
the buyer has to arrange the insurance cover by himself
The buyer may still ask the exporter to arrange some aspects of the insurance for
him
The exporter has to arrange the insurance cover to the goods
The exporter pays for insurance till the port of discharge
42. The period during which the buyer can begin a legal action is legally called:
Notification
Rectification
Legal action period
Detect liability period
43. The delivery depends on
Date of execution
Effective date
Preconditions
44. The Vienna Sales Convention is also called:
the uniform Law of International Sale
the Uniform Law on the Formation of Contract for the international Sale of Goods
the UN Convention on Contract for the International Sale of Goods
D. the UN Convention on Contract for acceptance

45. How many originals and copies is the air waybill issued according to the standard of
the International Air Transport Association-TATA?
A. Three originals and 3 copies
B. 3 originals and 6 copies
C. 3Originals and 9 copies
D. it depends on the requirements in the letter of credit
46. The parties to a contract are not always required to .....
A. Ignore
B. Apply
C. Refuse
D. Decline
47. A ban is issued on the export of jute products by newly elected government that has
on been preparing legislation on this subject for 5 years.
A. Yes
B. Questionable
C. No
50. The bank that the buyer asked to open a letter of credit is call
A. an issuing bank
B. an advising bank
C. confirming bank
D. opening bank
2
1. The decision of arbitrator is:
A. Law- oriented
B. Business-oriented
C. Action-oriented
D. Reaction-oriented
2. Under most laws, a buyer can make certain assumptions about goods. These
assumptions are called (by lawyers):
A. Express warranties
B. Negotiable warranties
C. Implied warranties
D. Implied guarantee
3. If the force majeure event continues for too long, both parties have the right to
A. Continue the contract
B. Terminate the contract

C. Make late delivery
4. If the price is quoted FCA, who pays for the freight?
A. The exporter
B. The carrier
C. The buyer
D. The forwarding agent
5. When parties agree to end a contract, occurs.
A. Termination
B. Frustration
C. Rescission (t b)
D. Suspension
6. In a contract, a formal definition is the best way of clarifying what exactly the two
sides have
A. Excused
B. Negotiated
C. Agreed
D. Solved
7. 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
8. A machine that consumes more fuel than specification is an example of:
A. Latent defect
B. Patent defect
C. Inherent defect
D. Apparent defect
9. When the bill of lading marked freight prepaid. Who pays for the freight?
A. The buyer
B. The seller
C. The agent
D. It depends on the agreement

10. Which of these is the cheapest option for the exporter?
A. Repair
B. Replace (part of the whole item)
C. Reduce the price
D. Return the goods
11. The clause covers General Average
A. A
B. B
C. A, B, C
12. 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
13. Which of the following examples is a patent defect?
A. Crushed of stained garments
B. The flooring shows signs of deterioration
C. High fuel consumption
D. Inadequately tightened nuts and bolts
14. 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
15. 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
D. The seller presents the necessary documents to the reconfirming bank
16. Which of the following discrepancies is not the problem with inconsistencies among
documents?
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 within the required time
C. Weights differ between 2 documents
D. Marks and numbers differ among documents
17. The buyer shall notify the seller of defects without undue delay. This is an example
of:
A. Defects liability period
B. Notification period
C. Rectification period
D. Legal action period
18. Termination for convenience occurs when one party simply decides to drop the
contract and
A. No reason is required
B. Reasons are required
C. Consultation is required
D. Conversation is required
case? A new small customer in a Pacific island republic much given to political
disturbances. The order is for $10000 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
20. 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
C. Compliance
D. Verification
21. 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
22. In a contract, consideration may consist of
A. Only right
B. Only interest
C. Only profit, detriment and loss
D. Right, interest, profit, detriment and loss
23. 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
D. Because the documents in a letter of credit are proofs of trust.
24. Continental law has well developed private law, especially contract and
A. Commercial law
B. Corporate law
C. Community law
D. Case law
25. 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
26. 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. Enforces the rest
27. Who issues bill of lading?
A. Captain
B. Exporter
C. Shipping company
D. Agent
28. 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 above
29. A disclaimer of warranty often accompanies delivery of
A. Software
B. Hardware
C. Footwear
D. Chinaware
30. Delivery of the goods under most export contracts takes place in the country of
A. The importer
B. The exporter
C. The agent
31. All risks covered is under clause
A. A
B. B
C. C
32. 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
C. DEQ Windhoek
33. A contract is not enforceable if
A. It is signed within power
C. It has illegal purpose
34. Transfer of risk from the seller to the buyer (Incoterm 2000): CIF
B. When the goods are handled to the first carrier

35. 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.
36. Negotiation of specification between the exporter and the importer can be
A. An effortless process
B. A difficult process
C. Done by an intermediary
D. A simple process
37. An offer dies if it has a/an:
A. Acceptance
B. Agreement
C. Adoption
D. Revocation
38. 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 necessary
D. The credit has expired.
39. Which of the following concepts is best used to avoid confusion when we mean an
assurance that the exporter will make good defects in his goods?
A. Warranty
B. Guaranty
C. Defects liability
D. Warrantee
40. 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
D. Either B or C
41. If the price is quoted FOB Singapore, then the seller is not obliged to pay insurance
and freight. Right or wrong?
A. Completely right
B. Wrong
C. Partly right, as the seller is obliged to pay only the freight and insurance necessary
to put the goods on board of the designated vessel by the buyer
D. Completely wrong, because the buyer is obliged to pay for insurance and freight on his
own account if term of trade is FOB.
42. The main concerns of the parties to contract should be
A. Dispute management
B. Dispute avoidance
C. Dispute cost
D. Dispute means
43. A commercial invoice must be made out to
A. The exporter
B. The shipper
C. Any party endorsing the bill of lading
D. The application for the letter of credit, normally to the buyer, unless otherwise
stated in the credit.
44. Another name for tender guarantee is
A. Revocation guarantee
B. Bid guarantee
C. Bond guarantee
D. Bid bond
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.
46. Defects may be which of the following? C design na
A. Defects in materials
B. Defects in workmanship
C. Both
D. None of these
47. 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
48. The dockworkers in Port Verbena go on strike
A. Yes
B. Questionnaire
C. No
49. Defects that come to light after buyers acceptance are called
A. Patent defects
B. Latent defects
C. Coherent defects
D. Apparent defects = patent
1.
A.
B.
C.
D.
2.
A.
B.
C.
3.
A.
B.
C.
D.
4.
A.
B.
C.
5.
A.
B.
C.
6.
A.
B.
C.
D.
7.
A.
B.
C.
D.
8.
3
A contract is a written agreement and it follows the meeting of minds and.
Offer and decline
Offer and refusal
Offer and acceptance qu trnh m phn
Offer and renewal
A bank is issued on the export of jute products by newly elected government
Yes
Questionable
No
Continental lawyers . Complicated grammar of the whereas- clause
Often avoid
Often use
Often take advantage of
Sometimes use
The clause covers General Average:
A
B
A,B,C
The contract should regulate what happen if Incoterms 2000 and the terms of contract
conflict normally the .. prevails
Incoterm
Contract
Incoterm and contract.
If is possible for the beneficiary (exporter) sometimes, though not often, to make a
draft on the bank to collect the money?
No. it isnt
It is impossible by all mean
The draft must be drawn on the buyer to the order payment not the bank
Yes, it is
Continental law is also called.
Civil law
Common law = case law = Anglo-American Law
Legal system
Lawful case
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.
B.
C.
D.
9.
100%
90%
50%
110%
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
C. The confirming bank
D. Any third bank
10. Why letter of credits 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 necessary documents to the bank
B. Because a letter of credit is issued by a issuing bank at the request of the buyer
D. Because the documents in a letter of credit are proof of trust
11. If the exporter knew the buyers intended purposes, and if the buyer relied on the
exporter knowledge and expertise, the buyer can reject the goods that are not suitable
for their intended purposes. This is called
A. Implied warranty of the suitability with intended purposes
B. Implied warranty of fitness for attention
C. Implied warranty of fitness for objectives
D. Implied warranty of fitness for intended purposes
12. If the price is quoted FOB Singapore, then the seller is not obliged to pay insurance
and freight. Right or wrong?
A. Completely right
B. Wrong
C. Partly right, as the seller is obliged to pay only the freight and insurance necessary to
put the goods on board of the designated vessel by the buyer.
D. Completely wrong because the buyer is obliged to pay for insurance and freight on his
own account if term of trade is FOB
13. If a contract is an entire agreement, earlier letters and documents..
A. Can be used as evidence
B. Become invalid
C. Prevail
D. Remain important
14. The point of delivery is much the same for all.. terms and .. terms- when
the exporter hand over the goods to the carrier
A. C & F
B. D & F
C. C & D
15. 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
16. Who issue export credit insurance?
A. The buyer
B. The exporter
C. An insurance company
D. Any export company
17. The defects liability clause should states:
A. The date of acceptance
B. Exporters duty if a defect comes to light
C. Both A & B
D. Only A
18. If shipment is made on CIF or CIP terms, the letter of credit will call for.
D. Either A or C
19. The lump-sum compensation is set too low
A. liquidated damages
B. quasi indemnity
C. penalty
20. To cure the defective goods, the best option for the exporter is:
A. taking back the defective goods and giving back the money
B. reducing the price
C. replacing the goods
D. dependent on the type of goods
21. The workforce at the factory goes on strike:
A. Yes
B. Questionable
C. No
22. The exporter's interests 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.
23. ..are the explanations.
A. Definition clauses
B. Whereas-recital clauses
C. Preamble clauses
D. Annex clauses
24. 'Door to door service" is offered. Which term should be used?
A. DDP
B. CIF
C. CIP
A. the importer
B. the exporter
C. the agent
26. Continental Law does not require long and contracts.
A. Loose
B. Lax
C. Brief
D. Detailed
27. The fact that manufacturer often tempted to be over-optimistic and to agree to
impossible specifications is.. in business.
A. lucrative
B. risky
C. advantageous
D. common
28. The answers to background questions are written
A. through the whereas-recital
B. through the annex
C. through provisions
D. through conditions
29. 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
30. The advantages of arbitration are
A. Private and foreseeable costs
B. Lengthy and open
C. Binding and rigid
D. Time consuming
31. . Whereas-clauses.
A. are provisions
B. are promises
C. are conditions
D. are not provisions, promises or conditions( they are explanation)
32. 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
33. Defects such as wrong items, broken or missing parts, scratches, and so on are called
A. patent defects
B. latent defects
C. inherent defects
D. concealed defects
34. The bill of lading issued by the carrier for sea transport is called
A. Seaway bill
B. Marine bill of lading
C. Sea way bill
B. The shipment was late.
C. There is no endorsement if endorsement is necessary.
D. The credit has expired.
36. Failure to meet specifications is a
A. Defect in workmanship
B. Defect in material
C. Defect in design
D. Defect in quantity
B. Road bill
C. Roadway bill
38. Mowing the buyer to repair the equipment at the exporter's cost .
A. is always the best choice for the exporter
B. is always the worst choice for the exporter
C. is often safe for the exporter
D. is often unsafe for the exporter
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
D. The bank insists on strict compliance.
40. Partial invalidity clause can help to avoid problems with contacts that.
E. might infringe government regulations
F. violate the trade laws
G. discourage trade
H. both b and c
41. Which of these does not require prior inspection by SGS?
A. The Philippines
B. Indonesia
C. The United Kingdom
D. All A, B and C
42. In a contract, the word" whereas" means
A. only that"
B. while'
C. when'
D. because' or 'considering that'
43. Export credit insurance is very attractive; however, it has certain limitations like....
A. high premiums 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.
D. Refusal from the insurance company to quote premiums due to risky business or the
buyers non-creditworthiness
44. Why do most exporters offer a discount for early payment, for example a 1% discount
if payment is made within 10 days of the date of invoice?
A. Because the discount is so attractive to the buyer
C. Because the exporter can substantially improves his cash flow
D. Because the exporter just wants to get payment on delivery
45. If the buyer come from a country which has poor reputation for enforcing awards, the
best methods of payment under the contract is a/ an..
A. Revolving L/C
B. At sight, confirmed L/C
C. Deferred, irrevocable L/C
D. Transferable L/C
46. Who issues bank guarantee?
A. The buyer
B. The exporter
C. Any third party
D. A bank
47. Inspection by the buyer is called:
A. Independent inspection
B. Inspection of goods prior to the shipment
C. Open package inspection
D. Customs inspection
48. Which of the following discrepancy is NOT the problem with insurance?
E. Document are not presented with the required time
F. The sum insured below the figure required
G. the insurance risks are not those specified in the credit
H. A certificate of insurance is produced while the credit calls for a policy
49. A contract requiring an exporter in Mozambique to deliver the contract goods Beira
Mozambique for the shipment by sea to Da esSallamTazania
A. FAS Beira
B. CIF Beira
C. FOB Da es Salaam
50. There is no connection between the letter of credit and the sales contract. Right or
wrong?
A. Completely right
B. Completely wrong
C. It depends
D. The buyer and the buyer may agree that all the term in their sales contract must be
stated in the L/C
4:
1. There are parties to a warranty and in a guarantee
A. 3/2
B. 3/3
C. 2/3
D. 2/2
2. 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
C. CFR Nairobi
3. 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 the bank to change the items 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
4. 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
C. DEQ Windhoek
5. A contract requiring an exporter in Mozambique to deliver the contract goods in Beria,
Mozambique, for the shipment by sea to Dar es Salaam, Tanzania
A. FAS Beira
B. CIF Beira
C. FOB Dar es Salaam

6. The two terminologies which mean the same thing are
A. Guarantee and warranty
B. Bond and surety
C. Warranty and defects liability
D. Guarantee and insurance
7. Which country requires that all goods imported into the country are inspected by the SGS
immediately before shipment?
A. The USA
B. Vietnam
C. Indonesia
D. The UK
8. 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 one expert. Could the
bank collect from Dawson the money it had paid to the exporter?
A. Definitely, it could
C. No, it couldnt
9. 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
10. The majority of shipping documents presented to banks under documentary credit
transactions accepted on first presentation. Right or wrong?
A. Completely right
B. Definitely wrong
D. It depends
11. In a contract under a Continental law, a recital .
A. Is essential
B. Is not useful
C. Is not essential
D. Is important
12. In a contract, consideration may consist of
A. Only right
B. Only interest
C. Only profit detriment, and loss
D. Right, interest, profit, detriment, and loss
13. Which type of bill of lading is negotiable
A. Surrender
B. Straight
C. To order
14. A 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
C. An offer made of an act in return for an act
D. An offer made of act in return for a promise
15. Small purchase in private life are often in the form of

A. Cash on delivery
B. Cash against invoice
C. Cash with order
D. Any of the above
16. Transfer of risk from the seller to the buyer (Incoterms 2000): DDP
A. When the goods are at the buyers premises
17. Shortage of supplies (Background: the exporter cannot get the raw jute from the supplier
because of a shipping delay)
A. Yes
B. Questionable
C. No
18. The defect liability clause should state:
C. Both A and B
D. Only A
19. Continental law is also called
A. Civil law
B. Common law
C. Legal law
D. Lawful case
20. 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
B. Perfect/conform to
C. Defective/differ from
D. Perfect/differ from
21. In contract, partial invalidity provision means the invalidity of one part of the contract

C. Affects the rest
D. Enforces the rest
22. For the exporter, the option to repair a defective item abroad
A. Is negligent
B. Can be costly
C. Is always the best choice
D. Is always the worst choice
23. The mechanism of a confirmed letter of credit works as follows:
B. Buyer instructs an issuing bank to instruct an advising bank to pay under a letter of
C. Buyer instructs an issuing bank to instruct a confirming bank to pay under a
letter of credit in favor of the seller
D. Buyer instructs an issuing bank to instruct any third bank to pay under a letter of
24. A voltmeter that is specified as accurate within 1 millivolt is accurate within only 5
millivolt is an example of:
A. Defective design
B. Defective materials
C. Defective workmanship
D. Misuse by the seller
25. 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 within the required time
C. Weights differ between two documents
D. Marks and numbers differ among documents
26. The bank notifying the exporter that the letter of credit has been opened is called
A. The issuing bank
D. The opening bank
27. is open-ended
A. Tailor-made
B. Floating
C. Open cover
28. happens when one party ends the contract because of breach by the order
A. Cancellation
B. Suspension
C. Impossibility
D. Termination
29. Who issues ocean bill of lading
A. Captain
B. Exporter
C. Shipping company
D. Agent
30. 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 buyers bank transfers funds
C. When the buyer instructs the bank to pay
D. When the funds reach the sellers bank account
31. An offer dies if it has a/an
A. Acceptance
B. Agreement
C. Adoption
D. Revocation
32. A price and payment clause taken from an export contract is as follows: The price
payable for the contract goods as specified in annex A is $500,000. What is missing?
A. The clause does not specify how payment will be made
B. The clause does not specify when payment is due
C. The clause lacks all the necessary five steps in negotiating payment mode, time,
place, delay and results of delay
D. The clause does not say where the money must be before the buyer is deemed to have
paid, define delay in payment and mention the consequences of delay
33. An endlessly renewed liability for defects is called:
A. Eternal warranty
B. Ephemeral warranty
C. External warranty
D. Explicit warranty
34. 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 want 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
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
36. Among a number of international bodies offering arbitration services, the in Paris is
the most prestigious
A. UCP
B. ADR
C. ICC
D. FAO
37. Transfer of risk from the seller to the buyer (Incoterms 200):CIP
38. 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
39. 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
B. D and F
C. C and D
40. What an offer is made, it is not applicable when it has ?
A. Suspension
B. Renovation
C. Revocation
D. Adaption
A. A
B. B
C. A,B,C
42. Transfer of risk from the seller to the buyer (Incoterm 2000): DES
A. When the goods are ex-ship
43. The cheapest mode of transport is
A. By sea
B. By air
C. By road
44. Continental law has well developed private law, especially contract and
A. Commercial law
B. Corporate law
C. Community law
D. Case law
45. A liquidated damages clause protects
A. The exporter rather than the importer
B. The importer rather than the exporter
C. Both sides
D. Neither the exporter nor the importer
46. Who issues export credit insurance?
A. The buyer
B. The exporter
D. An export company
47. It is common to put the definition clause of the contract
A. At the beginning
B. Near the beginning
C. At the end
D. Near the end
48. 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
49. repair by the buyer provision is often
A. Welcome by the seller
B. Beneficial to the seller
C. Avoided by the seller
D. Imposed by the seller
50. One of the three options available for settling disputes, litigation before the court is
internationally least attractive as it
A. Expensive and legalistic
B. Business-like and flexible
C. Time-saving and private
D. Fast and acceptable
5
1.Directions: Choose the answer that suits the question most
In settlement by deferred payment, the letter of credit is paid after delivery . Right
or wrong ?
E. Completely right
F. Definitely wrong
G. It depends
H. The letter of credit is not payable until a number of day
2.Directions: 4 answer choices are given below each sentence. Choose the best
answer then then mark the letter A, B, C, D on the screen
Which of these counts as a defect?
E. Wrong design
F. Fair wear and tear
G. Misuse
H. Missing items
3. Directions: Read the sentence given below. Choose the best answer that fits the
situation. Then mark the letter A,B,C on the screen.
(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.)
Shortage of supplies( background, the exporter cannot get the raw jute he need
from the supplier because of a shipping delay)
D. Yes
E. Questionable
F. No
4.Directions: Choose the answer that suits the question most
The majority of shipping documents presented to banks under documentary credit
transaction are accepted on first presentation, Right or wrong
E. Completely right
F. Definitely wrong
G. Neither right nor wrong
H. It depends
5.Directions: 4 answer choices are given below each sentence. Choose the best
answer then then mark the letter A, B, C, D on the screen
A warranty is aimed at:
E. Obtaining loans
F. Assurance of product performance
G. Credit purchase
H. Profit making
6. Directions: A word or phrase is missing in each of the sentences below.
Directions: 4 answer choices are given below each sentence. Choose the best
answer to completed . then mark the letter A, B, C, D on the screen
The Anglo-American contract is
E. Not the entire agreement
F. Traditionally the entire agreement
G. Sometimes the entire agreement

H. Rarely the entire agreement
7. In negotiating a letter of credit, the step in which the list of all required
documentation is incorporated into the contract is
E. Specification
F. Incorporation
G. Compliance
H. Verification
8.In a contract under a Continental law, a recital
E. Is essential
F. Is important
G. Is not useful
H. Is useful
9.Minimum Coverage is the so-called Cargo Clause..
D. A
E. B
F. C
10. How many timing problems are involved in Defects Liability Period?
E. Three
F. Four
G. Two
H. Five
11.The main difference between Continent and Anglo American contract law is
the degree of..
E. Codification
F. Formation
G. Automation
H. Interpretation
12. What happens if the issuing bank finds a problem with the documents and
refuses to send funds to the advising bank to cover payment ?
E. The advising bank has to suffer that loss due to their carelessness in
checking the shipping documents
F. The advising bank gets its money back from the exporter
G. The payments form the advising bank to the exporter are always made with
recourse. The exporter has to pay back the advising bank in such a case
H. It is the responsibility of the issuing bank of paying back the advising bank
in suck in case
13.What can protect both the exporter and the importer in an export contract?
E. A well-designed set of specifications
F. An itemized set of specification
G. A plain set of specification
H. None of these
14.Which of the following is the objective aimed at by the exporter to minimize

the risk of the goods being rejected of heavy defects liability claims?
E. Winning buyers goodwill
F. Keeping his promise

G. Negotiating detailed specifications
H. Making profit
15.Transfer of risk form the seller to the buyer ( incoterm 2000) CIP
E. When the goods are at the sellers premises
F. When the goods are handed to the first carrier
G. When the goods across the ships rail
H. When the goods are on board
16.The name of are normally the full, registered name odf the
company.
E. The exporter
F. The buyer
G. Either the exporter or the importer
H. The parties
17. In a contract under a Continental law, a recital..
E. Is essential
F. Is not useful
G. Is not essential
H. Is important
18.. is opened-ended
D. Tailor-made
E. Floating
F. Open cover
19.The mechanism of a confirmed letter of credit works as follows:
E. Buyer instructs issuing bank to issue a letter of credit in favor of the seller
F. Buyer instructs issuing bank to instruct an advising bank to pay under a
G. Buyer instructs issuing bank to instruct a confirming bank to pay under
a letter of credit in favor of the seller
H. Buyer instructs issuing bank to instruct any third bank to under letter of
20. In CIF and CIP contracts, the exporter normally assigns the insurance
agreement to
D. The buyer
E. The carrier
F. The issuing bank
contract. This is called..
E. Implied warranty of suitability
F. Implied warranty of conformity
G. Implied warranty of merchantability
H. Implied warranty of fitness for intended purpose
22. A contract is not enforceable if.
E. It is signed within power
F. It has a legal purpose
G. It has an illegal purpose

H. It has no purpose
E. The seller is liable for the goods
F. The buyer is denied of some of his normal nights
G. The seller will make good any defect
H. Contract prices would be far higher
24. In negotiating a letter of credit, the step in which the exporter rigorously.
Checks documentation and submits it to the bank is.
E. Agreement
F. Verification
G. Specification
H. Compliance
25. Which of the following discrepancies is NOT the problem with the Letter of
Credit?
E. The credit has expired
F. Document required by the credit are missing
G. The credit amount is exceeded
H. Insurance cover is expressed in a currency other than that of the credit
26.The two terminologies which mean the same thing are.
E. Guarantee and Warranty
F. Bond and Surety
G. Warranty and Defects Liability
H. Guarantee and Insurance

27.Normally, Risks are transferred at the point of
D. Delivery
E. Payment
F. Arrival
28.War risk is not included in..
D. A clause
E. B Clause
F. A,B,C clause
29.Negotiation of specification between the exporter and the importer can be
E. An effortless process
F. A difficult process
G. Done by an intermediary
H. A simple process
30. Why do the exporters offer a discount for early payment , for example a 1%
discount of payment is made winthin 10 days of the date of invoice ?
A. Because the discount is so attractive to the buyers
C. Because the exporter can sustantially improve his cash flow
D. Because the exporter just want to get payment for delivery
31. The method of payment which is dangerous for the exporter is :
A. Cash on delivery
B. Accepting a personal check
C. Prepayment
D. Export credit insurance
32. AS for Ango-American ,the decision of judge is always :
A. Predictable
B. Forseeable
C. Unpredictable
D. Estimated
33. If both parties perform their duties correctly, a contract is discharged by :
A. Default
B. Suspension
C. Performance
D. Breach
34. Dawson bought vanilla beans from Indonesia. Dawson instructed an American
bank to open a letter of credit. One of 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 one 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 could not
D.No question,it could
35.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 confirm
36. The bill of lading issued by the carrier for combined transport is called:
B. Combined bill
37.In a contract the word whereas means :
A. only that
B. while
C. when
D. because or consider that

38. Assuming shipment is by rail, what if a letter of credit demands the original bill
of lading ?
A. It is possible demand
C.Such a letter of credit is certain to cause delay in payment
D. The bank insists on strict compliance
39. UNABLE TO SEE
40. 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 tailors
shop with whom you have done business for 20 years.
A. Confirmed letter of credit.
B.Open account with no security
C. Open account with bank guarantee
D.Open account with export credit insurance
41. 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 espects of the
insurance for him
C.The exporter has to arrange the insurance cover to the goods

D.The exporter pays for insurance till the port of discharge
A.Notification
B. Rectification
C.Legal action period
D.Detect liability period
A. Date of excution
B. Effective date
C.Preconditions
44. the Vienna Sales Convention is also called:
A. the uniform Law of International Sale
B. the Uniform Law on the Formation of Contract for the international Sale of
Goods
C. the UN Convention on Contract for the International Sale of Goods
D.the UN Convention on Contract for acceptance
45. How many originals and copies is the air waybill issued according to the
standard of the International Air Transport Association-TATA?
A. Three originals and 3 copies

C. 3Originals and 9 copies
46. the parties to a contract are not always required to .....
A. Ignore
B. Apply
C.Refuse
D.Decline
47. A ban is issued on the export of jute products by newly elected government that
has on been preparing legislation on this subject for 5 years.
A.Yes
B. Questionable
C.No
50. the bank that the buyer asked to open a letter of credit is call
A. an issuing bank
B. an advising bank
C. confirming bank
D. opening bank
51. Dch san tingVit
The following documents shall be forwarded to BUYERs bank immediately after
loading date: Signed Commercial Invoice in 03 originals; Clean Shipped on
Board Ocean Bill of Lading in complete set of at least 03originals and 03 nonnegotiable copies signed and made out To order of Vietcombank Hanoi ;
Packing list in triplicate.
6
1. If both parties perform their duties exactly according to the contract, the contract is.
A. Discharged by performance
B. Discharged for performance
C. Discharged to performance
D. Discharges with performance
lading?
A. It is a possible demand
C. Such a letter of credit is certain to cause delay in payment.
3. If a country ratifies the Vienna Sales Convention, in the event of conflicts, the Vienna
Sales Convention can .. the national law.
A. Prevail over
B. Conform to
C. Follow
D. Adapt
4. 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
5. 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 one expert.
Could the bank collect from Dawson the money it had paid to the exporter?
C. No, it couldnt
6. The decision of arbitrators is.
A. Law- oriented
B. Business- oriented
C. Action- oriented
D. Reaction- oriented
7. Among a number of international bodies offering arbitration services,
the.. in Paris is the most prestigious.
A. UPC
B. ADR
C. ICC
D. FAO
8. It is common to put the definition clause.. of the contract.
A. at the beginning
B. near the beginning
C. at the end
D. near the end
9. Which the following is the least desirable option for the exporter?
A. Allow the buyer to repair at the exporters cost
B. Reduce the price
C. Return the goods and refund the price
D. Replace the defective items
delivery in Windhoek, Namibia.
A. CIF Winhoek
B. CIF Winhoek
C. DEQ Winhoek
11. What is a transferable credit?
A. It is the kind of credit which allows the exporter to transfer his right as the credits
beneficiary to ant third party.
B. It is the kind of credit which allows the first beneficiary to request the confirming
bank to pay a third party.
C. It is the kind of negotiable document with which the exporter can endorse for any
party.
D. It is the kind of credit with which the buyer will not necessarily know who is the
actual supplier of the goods.
D. The credit has expired
13. In settlement by sight payment..

14. When are documents considered to be stale?
A. When they reach the issuing bank too late
B. When they are submitted to the opening bank after the merchandise has already
arrived
C. When they reach the advising bank at the expiration of the letter of credit
D. When they are refused by the issuing bank
15. The word cash in international trade means
A. Coins and notes
B. Gold
C. Checks or bank transfers
D. Prepayment
16. Failure to meet specifications is a:
C. Defect in design
17. Inspection by carrier on dispatch is often carried out:
A. In sellers country
B. In buyers country
C. At sea
D. At customs area
18. The dock workers in Port Verbena go on strike.
A. Yes
B. Quenstionalble
C. No
19. Continental law is based on a.
A. Case law
B. Common law
C. Legal code
D. Legal system
20. 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
21. The stand-by letter of credit originated in the U.S. is used there
because.
A. it is very popular for U.S. exporters to ask for payment from their buyers of
customers
B. it is much more convenient to ask for one in the U.S. instead of the ordinary letters
of credit
C. the banking law in some states forbids banks to issue payment guarantee
D. English banks prefer to issue demand guarantees and ordinary letters of credit
22. Companies. to use the short form of the names in contracts.
A. are forced
B. are not forced
C. are allowed
D. are not allowed
23. a well-designed set of specifications protects buyer againstproduct.
A. advanced
B. dented
C. inferior
D. superior
24. The risk of rough handling is not covered under the cargo clause..
A. A
B. B
C. C
D. B and C
B. The exporter can ask the buyer to instruct the bank to change the terms of letter of
credit
C. The exporter can ask the bank to process the letter of credit with the discrepancies
but to pay pnly when (and if) the issuing bank permits payment
D. Any of the above
26. Which of the following statement is wrong?
A. The bank must check if 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
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
27. If both parties perform their duties correctly, a contract is discharged by:
A. Default
B. Suspension
C. Performance
D. Breach
28. The point at which money is deemed to be paid most referred by buyer
is.
29. Shortage of supplies (Background: The exporter cannot get the raw jute he needs from
A. Yes
B. Questionable
C. No
30. Minimum Coverage is the so-called Cargo Clause..
A. A
B. B
C. C
31. A disclaimer of Warranty often accompanies delivery of:
A. Software
B. Hardware
C. Footwear
D. Chinaware
32. The defects liability period is also called:
A. Warranty period
B. Guarantee period
C. Correction action period
33. A machine that consumes more fuel than specifications is an example of
A. Latent defect
B. Patent defect
C. Inherent defect
D. Apparent defect
34. 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
C. The coverage of the signature
D. The transferability of the signature
35. Disclaimer of warranty often accompanies:
A. Contracts for hardware
B. Contracts for footwear
C. Contracts for glassware
D. Contracts for software
36. The court of arbitration applies whatever.the parties stipulate
in the contract.
A. International law
B. Corporate law
C. National law
D. Business law
37. If the box With brief advice by teletransmission is crossed, it means
A. The exporter wants to be informed of the issuance of the letter of credit by
telex
B. The exporter wants to begin preparations for delivery
C. The buyers 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 letter of credit more quickly
38. 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
39. In a contract, the word wheras means
A. only that
B. while
C. when
D. because or considering that

A. Crushed or stained garments
41. Transfer of risk from the seller to the buyer (Incoterm 2000): DES
A. When the goods are ex-ship
42. A marine Bill of lading becomes negotiable document and no restriction on ownership
when it is..
A. to order, blank endorsed
B. surrendered, blank endorsement
C. to order, endorsed
43. Negotiation of specifications between the exporter and the importer can
be..
A. an effortless process
B. a difficult process
C. done by an intermediary
D. a simple process
44. If the price is quoted CIF San Francisco, who pays for the insurance and freight?
A. The exporter
B. The buyer
D. The confirming bank
45. Who issues ocean bill of lading?
A. Captain
B. Exporter
C. Shipping company
D. Agent
that required documentation is as agreed is..
A. Agreement
B. Incorporation
C. Verification
D. Compliance
47. Is there any requirement that the air waybill shows the date of the lights?
A. No, there isnt
B. Yes, there is
C. Never is there such a requirement
D. No, it is an incorrect requirement because a correctly completed waybill cannot
show this information
48. Drunken people have no to sign a contract
A. Contractual capacity
B. Contractual concept
C. Contractual government
D. Contractual branch
49. A contract comes into force when an offer is made by one side and.by other.
A. Accepted
B. Declined
C. Written
D. Drawn
50. .is open-ended.
A. tailor-made
B. floating
C. open cover
8
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
1. A Contract is not enforceable if.

It is signed within power
It has a legal purpose
It has an illegal purpose
It has no purpose
2. The advising bank never pays the exporter directly. Right or wrong?
Right
Wrong
It depend on type of credit
Neither right or wrong
3. A mistake about the goods in a contract means there is no .
Meeting of acceptance
Meeting of minds
Meeting of concepts
Meeting of agreement
Correct answer: B
4. The things that the exporter should keep in mind in negotiating payment are
Payment mode, timing, place, delay and results of delay
How payment will be made and the date of payment
Where the money must be before payment is considered to complete and what delay in
payment is excusable
Results of non- excusable delay in payment and time of payment
5. 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 this mean?
It means the exporter wants the bank in his country merely handle the paperwork
It means the exporter wants the bank in his country make the payment itself and recover
the fund from buyers bank
It means that the exporter is double guaranteed in term of payment by a third bank beside
the issuing bank and the advising bank.
It means the confirmation from the issuing bank in term of payment in case the buyer
defaults
6. To cure the defective goods, the best option for the exporter is :
Taking back the defective goods and giving back the money
Reducing price
Replacing the goods
D. Dependent on type of goods

7. What would be the effect on the price of the goods traded if the buyer wants the goods
sooner?
A. The price of goods will go up
B. The price of goods will go down
C. There is no change in price
D. The price of goods will go up as extra costs involved due to extra working shifting
from the manufacturer
8. Transfer of risk from the seller to the buyer ( Incoterm 2000) : DDU
9. What if the often 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
D. At the counters of the negotiating bank
10. A bill of lading with the note is.
A. Clean bill of lading
B. Claused bill of lading
C. Clear bill of lading
11. The bill of lading issued by the carrier for combined transport is called
B. Combined bill
12. In term of payment in international trade,
A. Risk rises and cost rise 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
13. A Contract is requiring an exporter in Ethiopia to send the contract goods by air for
A. CFA Windhoek
B. CIP Windhoek
C. DEQ Windhoek
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
A.
B.
C.
D.
14. Which of following is not needed for a legally binding contract to be in force?
Written contract
Offer and acceptance
Consideration
Conversation
15. Elderly people are to deal with contract
Unable
Able
Impossible
Unaffordable
16. The radio lacks the wires to connecting the loudspeaker to the amplifier is an
example of :
Defective design
Defective materials
Defective workmanship
Misuse by the buyer
Correct answer: C
17. The essence of Continental law is
Verification
Authentication
Codification
Acceptance
18. The arbitrators awards are
Consultative and examinatorial
Final and enforceable
Referable and reverable
All of above
19. is open-ended
Tailor-made
Floating
Open cover
20. In settlement by signt payment
The seller presents the necessary documents to the issuing bank
The seller presents the necessary documents to the advising bank
The seller presents the necessary documents to the paying bank
The seller presents the necessary documents to the reconfirming bank
21. It is common to put the definition clause of the contract
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
A.
B.
C.
D.
A.
B.
C.
D.
A.
At the beginning
Near the beginning
At the end
Near the end
22. Under the Angola- American law, a contract must give.
Both sides rights and duties
Each side rights
Each side duties
Not duties but rights
23. The exporter should have no liability for the goods when they are.
Beyond his control
In his control
Under his control
24. A well-designed set of specifications protects:
The exporter
The importer
Both parties
Neither of these
25. It is possible for beneficiary (exporter) sometimes, though not often, to make a draft
on the bank to collect money?
No, it isnt
It is impossible by all means
The draft must be drawn on the buyer to order payment, not the bank
Yes, it is
Credit by sight payment

27. Another name for warranty is..
A. Guarantee
B. Defect liability
C. Legal responsibility
D. Warrantee
28. Is there any reconfirming bank?

A. No, there isnt
B. Yes, there is one in case banks are reluctant to confirm letters of credit, especially
those from obscure banks.
C. Never is there
D. It depends.
29. The best solution for the exporter to make late payment impossible is.
seller shall be entitled to receive in case of late payment
guarantee
D. A confirmed, irrevocable, at sight letter of credit
30. All risks covered under .clause
A. A
B. B
C. C
B. Road bill
C. Roadway bill
32. How many timing problems are involved in Defects Liability Period?
A. Three
B. Four
C. Two
D. Five
A. Latent defect
B. Patent defect
C. Inherent defect
D. Apparent defect
draft drawn on the buyer from the seller?
B. The bank will pay the seller as long as the documents submitted comply with all the
terms of the letter of credit
D. The bank agrees to pay the bill when it matures.
A.
B.
C.
D.
A.
35. To avoid confusion, many contract drafters use .. instead of warranty

Guarantee
Warrantee
Legal responsibility
Defect liability
36. Which of these requires prior inspection by SGS?
Indonesia
B. Malaysia
C. Thailand
D. Vietnam
37. The bill of lading issued by the carrier for rail transport is called
A. Railway bill
B. Railwaybill
C. Railway consignment note or rail consignment note
D. Railway bill of lading
38. 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
B. The exporter
C. The bank of the exporter

D. The bank of the buyer
39. A decision of arbitrators is.
A. Law - oriented
B. Business - oriented
C. Action oriented
D. Reaction oriented
40. Anglo American law develops through.
A. Law code
B. Arbitrators decisions
C. Court decisions
D. Legal system
41. The costs of L/C amendments are normally for
A. the buyers account
B. the exporters account
C. the issuing banks account
D. the one who asks for such amendments
42. The disadvantage ofpolicy is that it is set up for particular time and automatically
expires.
A. tailor made
B. floating
C. open cover.
43. Termination for default occurs when the contract names certain.which allow
one side to terminate.
A. Time limits
B. Defaults
C. Situations
D. Conditions
44. Minimum Coverage is so-called Cargo Clause

A. A
B. B
C. C
parties should check
46. 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
C. non negotiable
D. amicable
47. 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 credits value, not its full value
D. Payment is still safe but it is delayed
48. War risk is not included in
A. A clause
B. B clause
C. A,B,C clause
B. Inspection of goods prior to shipment

9
wrong?
A. Completely right
B. Completely wrong
C. It depends
D. Exporter and the buyer may agree that all the terms in their sales contract must be
stated in the letter of credit.
2. Quality assurance and customer satisfaction are the same issues for customers .
A. in domestic market
B. in overseas markets
C. Both A and B
D. neither A nor B
3. A marine bill of lading can be negotiable document with which.
A. The buyer can use itto resell the goods during shipment
B. The exporter can use itto resell the goods during shipment
C. The issuing bank can use itto resell the goods to another customer.
D. The buyer can use itto negotiate a price with the negotiating bank
4. Which of the following is NOT the method of issuing the letter of credit?
A. By email
B. By airmail
C. By mail
D. By teletransmission.
5. Anglo-American law is also called..
A. Civil law
B. Legal code
C. Common Law
D. Law code
6. How do you know Bill of lading is "Marine Bill of lading?There is a..
A. on board notation
B. consignee
C. shipper
7. Continental law prevails in ..
A. The USA
B. Europe
C. The Vienna convention system
D. All countries in the world
8. When the Bill of lading marked "freight prepaid. Who pays for the freight?
A The Buyer
B. The Seller
C. The agent
D. It depends on the agreement.
9. An offer dies if it has a/an .
A. Acceptance
B. Agreement
C. Adoption
D. Revocation.
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 otherthan that of the credit.
11. Parties to contract for the sale of goods are free to choose.
A. Applicable law
B. International law
C. Corporate law
D. Business law
12. There are panics to a warranty and in a guarantee.
A three/two
B. three/three
C. two/three
D. two/two
A. taking back the defective goods and giving back the money
B. reducing the price
C. replacing the goods
D. dependent on the type of goods
14. The Anglo-American contract is......
A. not the entire agreement
B. traditionally the entire agreement
C. sometimes the entire agreement
D. rarely the entire agreement
15. The answers to the questions of implied warranties are supplied by
A The contract provisions
B. The UCC
C. Most laws
D. The contract
16. A contract comes into force when an offer is made by one side and....by the other.
A Accepted
B. Declined
C. written
D. Drawn
17. Companies . . . . . . . . to use the short form of the names in contracts.
A. are forced
B. are not forced
C. are allowed
D. are not allowed
18. The two terminologies which mean the same thing are....
A Guarantee and Warranty
B. Bond and Surety
19. A guarantee is:
A Unilateral
B. Tripartite
C. Bilateral
D. Multilateral
20. With a well-designed set of specications, the seller can protect its and avoid costs.
A. reputation
B. production
C. resolution
D. protability
21. "Minim1nn Coverage is the so-called Cargo Clause .......
A. A
B. B
C. C
22. The bill oflading issued by the carrier for road transport is called .
A Road bill oflading
B. Road bill
C. Roadway bill
23. To avoid confusio11_ many contract drafters use ".......... instead of warranty.
A guarantee
B. warrantee
C. legal responsibility
D. defect liability
interest and the cost of any delay along the payment route properly belongs to
A The buyer
B. The exporter
25. The background of the contractis provided in the form .
A. a clause
B. a denition
C. the annex
D. a whereas-recital
26. The lump-sum compensation is set too high .
A. liquidated damages
B. quasi indemnity
C. penalty
27. There has no power to enforce his solution or to bind the parties, his task is to suggest
affair solution only.
A Judge
B. Conciliator
C. Magistrate
D. Lawyer
28. Who signs "shipped on board" notation?
A Captain
B. Exporter
C. Shipping company
D. Agent
29. The expiry date of the letter of credit is.....
A. The date the exporter will be paid for goods sold
B. The last date for presentation of documents to the bank
C. The date the letter of credit no longer effective
D. The last date the shipment should be made by the exporter.
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
C. invoice
31. ............can create 110- contract situations
A. Only duress
B. Only fraud
C. Only mistake
D. Duress,fraud, and mistake all

32. Why is the Certicate of Origin required?
A. Because the goods imported are under a preferential tariff or other
agreement.
B. Because the exporter has to prove that his exported goods are legal.
C. Because the exporter has to show his proof of paying tax to the customs in the
buyer's country.
D. Because it is one of the key requirements under the letter of credit's terms.
33. After making the shipment of goods to the buyer, the exporter presents the shipping
documents to...
A. The issuing bank
D. The opening bank
delivery in Windhoek, Namibia_
A. CIF Windhoek
B. CIP Windhoek
C. DEQ Windhoek
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
36. The lump-sum compensation is set about right
A. liquidated damages.
B. quasi indemnity
C. penalty
C. Defect in design
38. 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.
39. Of the three options available for settling disputes, litigation before the court is
internationally least attractive as it is:
B. Business- like and flexible
40. If the box "With brief advice by teletransmission" is crossed, it means:
A. The exporter wants to be informed of the issuance of the letter of credit by
telex.
B. The exporter wants to begin preparations for delivery.
issued in his favor.
D. The exporter wants to know about the issuance of the letter of credit more quickly.
41. 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.
42. Which type of bill of lading is negotiable?
A. surrender
B. straight
C. to order
Zambia with freight paid by the exporter.
A. CFR Lusaka
B. CPT Lusaka
C. CFR Nairobi
44. The things that the exporter should keep in mind in negotiating payment are .....
A. Payment mode, timing, place, delay and results of delay.
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.
45. 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.
46. 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
47. A letter of credit can be either "revocable" or "irrevocable". Few exporters will accept
a revocable letter of credit, so the plain expression "letter of credit" generally means
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 of the
contract according to the ICC's rules.
C. Right.
D. Right, because in the absence of a clear indication, letter of credit are deemed to be
irrevocable.
Contract by an event beyond his reasonable control, then this event shall be deemed
force majeure.)
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
49. 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
C. Post-delivery inspection
D. Customs inspections
50. 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
10
1. The incoterm contains 13 terms.
a. 1990
b. 2000
c. 2010
d. 1990 and 2000
2. In negotiating a LC, the step in which the exporter check the credit to see that
required documentation is as agreed is
a. Agreement
b. Incorporation
c. Verification
d. Compliance
3. The question of warranty is disposive. This mean:
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-existent
4. which of the following discrepancies is NOT the problem of 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 descriptions of the goods in the invoice and the description of the goods in the
d. There is no endorsement if endorsement is necessary
a. In seller country
b. In buyers country
c. At sea
d. At customs area
6. In settlement by sign payment
a. The seller present the necessary documents to the issuing bank
b. The seller present the necessary documents to the advising bank
c. The seller present the necessary documents to the paying bank
d. The seller present the necessary documents to the reconfirming bank
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.
8. Defect include
a. Mistake
b. Materials
c. Fair wear and tear
d. Misuse
9. Anglo-American law, a contract must give
a. Both sides rights and duties
b. Each side rights
c. Each side duties
d. No duties but rights
10. Inspection of the goods by the buyer in the manufacturers factory is referred to as:
a. Inspection by inspection service
b. Pre-delivery inspection
c. Post-delivery inspection
d. Customs inspection
11. The bill of lading issued by the carrier for rail transport is called
a. Railway bill
b. Rail waybill
c. Railway consignment note
d. Railway bill of lading.
been preparing legislation on this subject for 5 years
a. Yes
b. Questionable
c. No
13. Termination may be for
a. Disruption
b. Authentication
c. Convenience
d. Adoption
14. The force majeure suggested by International Chamber of Commerce, for example,
states that payment of interests on overdue sums payable to the seller is by
a. Excused/force majeure
b. Not excused/force majeure
c. Excused/Acts of God
d. Excused/Contingencies
15. Companies to use the short form of the name in the contracts.
a. Are forced
b. Are not forced
c. Are allowed
d. Are not allowed
16. In a contract under a Continental Law, a recital

a. Is essential
b. Is important
c. Is not useful
d. Is useful
a. Date of execution
b. Effective date
c. Preconditions
18. Normally, Risks are transferred at the point of
a. Delivery
b. Payment
c. Arrival
19. Elderly people are to deal with a contract
a. Unable
b. Able
c. Impossible
d. Unaffordable
20. To background of the contract is provided in the form of
a. A clause
b. A definition
c. The annex
d. A whereas-recital
21. Transfer of the risk from the seller to the buyer (Incoterm 2000): DEQ
a. When the goods are ex-quay
b. When the goods are handed to the first carrier
c. When the goods across the ships rail

d. When the goods are on board
22. In the price quoted CIF San Francisco, who pays for insurance and freight?
a. The exporter
b. The buyer
c. The forwarding agent
d. The confirming bank
23. Where is often the place of expiry of the credit?
a. At the counter of the issuing bank
b. At the counter of the advising bank
c. At the counter of the confirming bank
d. At the counter of the negotiating bank
24. 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
d. Repair the goods
25. What is transferable credit?
a. It is the kind of credit which allows the exporter to transfer his right as exporter as the
credits 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.
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.
26. For the exporter, the option to repair a defective item abroad
a. Is negligent
b. Can be costly
c. Is always the best choice
d. Is always the worst choice.
27. The majority of shipping documents presented to banks under documentary credit
transactions are accepted on first presentation. Right or wrong?
a. Completely right
b. Definitely wrong
c. Neither right nor wrong
d. It depends
28. Unless the LC 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 %
29. Anglo-American law develops through
a. Law Code
b. Arbitrators decisions
c. Court decisions
d. Legal system
30. The entire agreement provision means must be established within the contract
itself.
a. The background of the contract
b. Important letters and memoranda
c. Contract documents
d. All of these
31. The advising never pays the exporter directly, right or wrong?
a. Right
b. Wrong
c. In depends on the type of credit
d. Neither right nor wrong.
32. How to make a bill of lading negotiable
a. Stamp the word Negotiable across the surface of 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.
33. In principle the buyer can reject delivered goods if they do not conform the contract.
This is called
a. Implied warranty of suitability
b. Implied warranty of conformity
c. Implied warranty of merchantability
d. Implied warranty of fitness for intended purpose
34. If the price is quoted CIP Marsellie, who pays for insurance and freight?
a. The buyer
b. The exporter
c. The issuing bank
d. The forwarding agent
35. Cancellation on grounds makes no legal sense
a. Great
b. Genuine
c. Trivial
d. Acceptable

a. Acceptance
b. Agreement
c. Adoption
d. Revocation
a. Notification period
b. Rectification period
c. Legal action period
d. Defect liability period
38. What if a LC requires an appropriate wildlife certificate?
a. Its a vague argument
b. The bank and the exporter may have different on what is different
c. It should be more specific like what the certificate must show and who should issue it
d. All of the above
39. The risk of rough handling is not covered under the cargo clause
a. A
b. B
c. C
d. B and C
40. What can a manufacturer sometimes accept a loss on an export dea?
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
a. Taking back the defective goods and giving back the money
b. Reducing the price
c. Replacing the goods
d. Dependent on the type of goods
42. Transfer of risk from the seller to the buyer (Incoterm 2000): DDU
a. When the goods are at the buyers premises
43. The workforce at the factory go on strike
a. Yes
b. Questionable
c. No
44. If the buyer comes from the country which has the poor reputation for enforcing
awards, the best method of payment under the contract is a /an
a. Revolving LC
b. At sight, confirmed LC
c. Deferred, irrevocable LC
d. Transferable LC
45. Which of the following is essential to a successful business?
a. Quality
b. Customer satisfaction
c. Correct marking and packaging
d. On-time delivery
a. A
b. B
c. A,B,C
47. The avoid the dangers of slow payment, the 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 to his bank
c. The buyers bank transfers funds
d. Funds reach the sellers bank account and at his full disposal
48. Export credit insurance which gives the exporter an acceptable level of security in
terms of payment shall be paid by
a. The buyer
b. The exporter
c. A bank
d. An insurance company
49. In contracts, is not normally allowed
a. Delegation of duties
b. Assignment of rights
c. Performance of obligations
d. Fulfillment of duties
50. In a performance guarantee, if the seller works badly or not at all, the guarantor will
pay the buyer, within stated limits,
a. 100% of the loss of the beneficiary
b. The costs of the principals failure to perform
c. The whole contract price
d. Between 5 and 10 % contract price
11
A. Is essential
B. Is important
C. Is not useful
D. Is useful
2. The stand-by letter of credit originated in the US is used there because
A. It is very popular for US exporters to ask for payment from their buyers or customers.
B. It is much more convenient to ask for one in the US instead of the ordinary letters of
credit.
C. The banking law in some states forbids banks to issue payment guarantee
D. English banks prefer to issue demand guarantees and ordinary letters of credit.
3. If the price is quoted FOB Singapore, who pays for the insurance and freight?
A. The exporter
B. The buyer
4. Export credit insurance which gives the exporter an acceptable level of security in
A. The buyer
B. The exporter
C. A bank
D. An insurance company
5. A letter of credit can be either revocable or irrevocable. Few exporters will accept
a revocable letter of credit, so the plain expression letter of credit generally means
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 context of the credit and of the
contract according to the ICCs rules
C. Right
D. Right, because in the absence of a clear indication, letter of credit are deemed to be
irrevocable.
6. 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
D. Having no guarantee for payment
A. Continue the contract
B. Terminate the contract
C. Make late delivery
8. The Incoterms contains 11 terms
A. 1990
B. 2000
C. 2010
9. If the price is quoted CFR HaiPhong, who pays for the freight?
A. The buyer
B. The exporter
C. The carrier

10. A payment guarantee simply commits the bank to pay if the buyer defaults. The
payment guarantee is usually for
A. 100%
B. Less than 100%
C. 10%
D. Between 5% and 10%
11. 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
12. Returned shipment to the exporters country means:
A. The deal is a total loss for the exporter
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
13. Which of the following is essential to successful business?
A. Quality
B. Customer satisfaction
C. Correct marking and packaging
D. On-time delivery
14. Transfer of risk from the seller to the buyer (Incoterms 2000): FAS
A. When the good are ex-quay

A. Right
B. Wrong
C. It depends on the type of credit
D. Neither right or wrong
16. 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 the situation
17. The has no power to enforce his solution to bind the parties, his task is to suggest a
fair solution only.
A. Judge
B. Conciliator
C. Magistrate
D. Lawyer
18. The lump-sum compensation is set too high
A. Liquidated damages
B. Quasi indemnity
C. Penalty
19. It is possible for the beneficiary (exporter) sometimes, though not often, to make a
A. No, it isnt
B. It is impossible by all means
C. The draft must be drawn on the buyer to order payment, not the bank
D. Yes, it is
A. Date of execution
B. Effective date
C. Precondition
21. Which of the following discrepancies is NOT the problem with Insurance?
A. Documents are not presented within the required time
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 produces while the credit calls for a policy
wrong?
A. Completely right
B. Definitely wrong
C. It depends
A. It is the kind of credit which allows the exporter to transfer his right as the credits
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
C. It is the kind of negotiable document with which the exporter can endorse for any third
party
D. It is kind of credit with which the buyer will not necessarily know who is the actual
supplier of the goods
24. If the price is quoted CIF San Francisco, who pays for the insurance and freight?
A. The exporter
B. The buyer
25. CIF and CIP contracts are especially confusing since they name the point of
A. Departure
B. Destination
C. Embarkation
26. Continental law is widely used for
A. International issues
B. National issues
C. Both national and international issues
D. Neither international nor national issues
27. Exporter prefers:
A. The return of the defective item to the replacement of it
B. The replacement of the defective item to the return of it
C. The return of the goods and refund of the price
D. None of these
28. Under Anglo-American law, a contract must give

A. Both side rights and duties
B. Each side rights
C. Each side duties
D. Not duties but rights
29. If both parties perform their duties exactly according to the contract, the contract is
D. Discharged with performance
case? A contract for supply of cloth worth $5,000 per month to the government of
Oceanea a prosperous country. Duration of the contract is 2 years, but renewable.
Contract represents 25% of turnover.
A. Open account with bank guarantee
B. Open account with export credit insurance
C. If possible, a bank guarantee. Otherwise, export credit insurance
31. Another name for Tender Guarantee is
B. Bid guarantee
C. Bond guarantee
D. Bid bond
case? A contract for supply of cloth worth $5,000 per month to the government of
Oceanea a prosperous country. Duration of the contract is 2 years, but renewable.

Contract represents 0.5% of turnover.
D. Export credit insurance is advisable. Selling on open account with no security at all is
also possible
33. The answer to background question are written
A. Through the whereas-recital
B. Through the annex
C. Through provisions
D. Through conditions
34. 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 the goods
D. The exporter pays for insurance till the port of discharge
A. 3/2
B. 3/3
C. 2/3
D. 2/2
assumptions are called (by lawyers):
37. A contract that is ultra vires is ..
A. Well enforceable
B. Unenforceable
C. Valid
D. Effective
A. Mode of payment, timing, place of payment
B. Delay in payment and results of delay
D. Delivery, payment and warranty items
39. In CIF and CIP contract, must pay for insurance from the point of delivery to the
named point of arrival.
A. The exporter
B. The importer
C. The carrier
A. Acceptance
B. Agreement
C. Adoption
D. Revocation
A. Latent defect
B. Patent defect
C. Inherent defect
D. Apparent defect
42. The exporters wording and the buyers wording in the defects liability provision
represent:
A. A major contract issue
B. A minor contract issue
C. Nonsense
D. Profit and loss of each party
43. Who usually pays for the defects?
A. The importer
B. The exporter
C. Both parties
D. A third parties
44. Two parties sign a contract
A. The contract is binding
B. The contract is effective
C. The contract is binding and effective
45. Liquidated damages clause protects
C. Both sides
D. Neither exporter nor the importer
46. The arbitrators awards are

A. Consultative and examinatorial
B. Final and enforceable
C. Referable and reverable
D. All of the above
47. Export credit insurance is a kind of special privilege that an exporter may get from
his governments export incentives and support. Right or wrong?
A. Completely right
B. Absolutely wrong
D. It is not a charity. It is beneficial for both exporter and insurance company
A. Verification
B. Authentication
C. Codification
D. Acceptance
49. The defects liability clause should state:
C. Both A and B
D. Only A
50. When parties agree to end a contract, .occurs.
A. Termination
B. Frustration
C. Rescission
D. Suspension
12
12:
1. The lump-sum compensation is set too low
B. Quasi indemnity
C. Penalty
delivery in Windhoek, Nambia
A. CIF Windhoek
B. CIP Windhoek
C. DEQ Windhoek
3. The machanism of a confirmed letter of credit in favor of the seller
B. Buyer instructs an issuing bank to instruct an advising bank to pay under a
C. Buyer instructs an issuing bank to instruct a confirming bank to pay
under a letter of credit in favor of the seller
D. Buyer instructs an issuing bank to instruct any third party bank to pay under a
4. Under most laws, a buyer can make certain assumption about good. These
assumption are called (by lawers):
A. In sellers country
B. In buyers country
C. At sea
D. At customs area
6. The defect liability clause should state:
A. the date of acceptance
B. exporters duty if a defect comes to light
C. both A and B
D. only A
7. (Note: If either party is prevented from, or delayed in, performing any duty under
this contract by an event beyond his reasonable control, this shall be deemed force
majeure)
Shortage of supplies (Background: The exporter cannot get the raw jute he needs
from the supplier because of a chipping delay).
A. Yes
B. Questionable
C. No
8. To avoid the dangers of slow payment, exporter 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 buyers bank transfer funds
D. Funds reach the sellers bank account and at his full disposal
9. Where is often the place of expiry of the credit
10. The advantages of arbitration are
B. Lengthy and open
D. Time-consuming
11. Which of these does not count as defect?
A. Defective design
B. Misuse
C. Defective materials
D. Defective workmanship
12. Independent inspection reports on
A. The weight of the goods
B. The size of the goods
C. Both A and B
D. None of these
contract and
A. is essential
B. is important
C. is not useful
D. is useful
15. Defects include:

A. mistake
B. Materials
C. Fair wear and tear
D. Misuse
16. As for Anglo-American law, the decision os the judge is always
A. Predictable
B. Foreseeable
C. Unpredictable
D. Estimated
17. It is common to put the definition clause of the contract.
A. at the beginning
C. at the end
D. near the end
18. The main difference between continental and Anglo-American law is the degree
of
A. Codification
B. Formation
C. Automation
D. Interpretation
19. The first step in negotiating a letter of credit is
A. incoporation
B. Specification
C. Agreement
D. Verification
20. The Anglo-American contract is
A. not the entire agreement
B. traditionally the entire agreement
C. sometimes the entire agreement
D. rarely the entire agreement
21. If a country ratifies the Vienna Sales Convention, in the event os cnlicts, the
Vienna Sales Convention can the national law.
A. Prevail over
B. Conform to
C. Follow
D. Adapt
22. In negotiating a letter of credit, the first step in which the buyer applies for the
letter of credit specifying the agreed documentation is
A. incoporation
B. verification
C. Compliance
D. None of the above
23. In settlement by acceptance, what will the bank do after receiving the documents
and draft drawn on the buyer from the seller?
B. The bank will pay the seller as long as the documents submitted comply with
all the terms of the letter of credit
D. The bank agrees to pay the bill when it matures.
24. The bill of lading issued by the carrier for air transport is called..
A. Air waybill
B. Air bill of lading
C. Air way bill of lading
D. Airway bill
25. The guarantor is usually a
A. bank
B. insurance company
C. both A and B
D. Neither A nor B
26. Who issues export credit insurance?
A. The buyer
B. The exporter
D. Any export company
27. Elderly people are to deal with a contract
A. Unable
B. Able
C. Impossible
D. Unaffordable
28. 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
B. D and F
C. C and D
A. CFA Lusaka
B. CPT Lusaka
C. CFR niobi
30. In a guarantee, a guarantor is often:
A. The buyer
B. The seller
C. The bank
D. The manufacturer
31. 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
32. (Note: If either party is prevented from, or delayed in, performing any duty under
this contract by an event beyond his reasonable control, this 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
B. Questionable
C. No
33. The disadvantage of policy is that it is set up for particular time and
automatically expires
A. tailor-made
B. floating
C. open cover
chosen will be
A. Bank guarantee
B. Open account
C. Export credit insuarance
35. A price and payment clause taken from an export contract is as follows: The
price payable for the contract goods as specified in Annex A is $5000,000. What
is missing?
A. The clause does not specify how payment will be made
B. The clause does not specify when payment is due
C. The clause lacks all the necessary five steps in negotiating payment like
payment mode, time, place, delay and results of delay
D. The clause does not say where the money must be before the buyer is deemed
to have paid, define delay in payment and mention the consequences of delay
36. 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 isnt
B. It is impossible by all means
C. The draft must be drawn on the buyer to order payment, not the bank
D. Yes, it is
37. Two Parties sign a contract

38. A guarantee is:
A. Unilateral
B. Tripartite
C. Bilateral
D. Multilateral
39. 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, jusst leave it blank
C. Make the bill of lading blank endorsed
D. Fill the words to order in the Consignee box
40. Anglo-American law is called
A. Civil law
B. Legal code
C. Common law
D. Law code
41. Inspection of the goods by the buyer in the manufacturers factory is refered to :
42. What is 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
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 axactly and refuse an
incomplete set waybills
43. Anglo-American law is:
A. Law code
B. Case law
C. Civil law
D. Legal code
44. A bank guarantee which gives the exporter an acceptable lavel of security in terms
of payment shall be paid by
A. The buyer
B. The exporter
C. A bank
D. A third party
45. When the Bill of lading marked freight prepaid. Who pays for the freight?
A. The buyer
B. The seller
C. The agent
A. continue the contract
B. terminate the contract
C. make late delivery
47. Feeble-minded people are legally unable to contract
A. Sign
B. Decline
C. Refuse
D. Resign
48. Which of the following is not the method of issuing the letter of credit?
A. By email
B. By airmail
C. By mail
D. By teletransmission
A. A clause
B. B clause
C. A, B, C clause
50. Minimum Coverage is so-called Cargo Clause
A. A
B. B
C. C
13
1. The entire agreement position means.. must be established within the contract
itself
A. The background of the contract
B. Important letter and memoranda
C. Contract documents
D. All of these
2. All risks covered is under. clause
A. A
B. B
C. C
3. The disadvantage of policy.. is that its set up for particular time and
automatically expires.
A. Tailor-made
B. Floating
C. Open cover
4. If the price is quoted CIU Marseille, who pays for insurance and freight?
A. The buyer
B. The exporter
C. The issuing bank
5. There are .parties to a warranty and.in a guaranty
A. three/two
B. Three/three
C. Two/three
D. Two/two
6. In settlement by deferred payment, if the seller needs more money immediately,
what can he do?
A. There is no way he can get money immediately
B. He can exchange the letter of credit cash with any agreement bank
C. The seller can realize some part of the letter of credits value, not its full value
D. Payment is still safe but its delayed.
7. What does prompt payment of the letter of credit depend on?
A. It depends on the presentation of correct documentation of the exporter
B. It depends on kind of the 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.
8. Where is the often place of expiry of the credit
9. 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
C. Magistrate
D. Lawyer
10. In the contract, consideration may consist of..

A. Only right
B. Only interest
C. Only profit, detriment and loss
D. Right, interest, detriment and loss
11. Defects such as wrong items, broken and missing parts, scratches, and so on are
called.
A. Patent defects
B. Latent defects
C. Inherent defects
D. Concealed defects
12. The court of arbitration applies whateverthe parties stipulate in the contract
B. Corporate law
C. National law
D. Business law
13. Every contract is governed by .
A. Common law
B. Vienne Convention
C. Applicable law
D. Civil law
14. Within most Anglo American jurisdictions, a contract.
A. Can be one sided
B. Can be two-sided
C. Can be either one-sided and two-sided

D. Must be two-sided
documentation and submit it to the bank is..
A. Agreement
B. Verification
C. Specification
D. Compliance
A. The exporter
B. The carrier
C. The buyer
17. As for Anglo- American, the decision of the judge is always
A. Predictable
B. Foreseeable
C. Unpredictable
D. Estimated
18. Transfer of risk from the seller to the buyer ( Incoterm 2000) DDU
D. When the goods are the board
19. What can protect both the exporter and the importer in an exporter contract
A. A well- designed set of specifications

B. An itemized der of specifications
C. A plain set of specification
D. None of these
20. The hereinafter called wording can prevent legal problem caused by
A. Misspelling names
B. Mistyping names
C. Misreading names
D. Misaccepting names
21. What is the transferable credit
A. Its a kind of credit which allows the exporter to transfer his right as the credits
beneficiary to any third party.
B. Its a kind of credit which allows the first beneficiary to request the
confirming bank to pay a third party
C. Its a kind of negotiating document with which the exporter can endorse for
any third party
D. Its a kind of credit with which the buyer will not necessarily know who is the
actual supplier of the goods.
B. Quasi indemnity
C. Penalty
A. Right
B. Wrong
C. It depends on type of credit

D. Neither right or wrong
24. Allowing the buyer to repair the equipment at the exporters cost
A. Is always the best choice for the exporter
B. Is always the worst choice for the exporter
C. Is often safe for the exporter
D. Is often unsafe for the exporter
25. When parties agree to end a contract..occurs
A. Termination
B. Frustration
C. Rescission
D. Suspension
26. In CIF and CIP contract,.must pay for insurance from the point of delivery to
the named point of arrival
A. The exporter
B. The importer
C. The carrier
27. Exporter credit insurance is a kind of special privilege that an exporter may get
from his government s export incentives and support. Right or wrong?
A. Completely right
B. Absolutely wrong
C. Neither right or wrong
D. Its not a charity. Its beneficial for both exporter and insurance company
28. Nuts and bolts are inadequately tightened represent:
A. Defective materials
B. Defective design
D. Misuse
29. 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
30. Different legal systems regulate that rejection of delivered goods must be total
can be partial
A. Or
B. And
C. And/or
D. Nor
31. If the price is quoted FOB Singapore, then the seller is not obliged to pay
insurance and freight. Right or wrong?
A. Completely right
B. Wrong
C. Partly right, as the seller is not obliged to pay only the insurance and
freight necessary to put the goods on board of the designated vessel by the
buyer.
D. Completely wrong, because the buyer is obliged to pay insurance and freight
on his own account if term of trade is FOB.
32. 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
33. Who signs Shipped on board notation?
A. Captain
B. Exporter
C. Shipping company
D. Agent
A. Verification
B. Authentication
C. Codification
D. Acceptance
35. Continental law copes with
A. Personnel problems
B. International trade
C. National issues
D. Individual conflicts
36. If the price is quoted FAS Osaka, who pays the freight?
A. The shipper
B. The exporter
D. The buyer
37. Which of the following is the least desirable option for the exporter?
A. Allow the buyer to repair exporters cost
B. Reduce the price
38. Inspection for the buyer is called
B. Inspection for goods prior to shipment
A. Its signed within power
40. A marine bill of lading can be negotiable document with which?
A. The buyer can use it to resell the goods during shipment
B. The exporter can use it to resell the goods during shipment
C. The issue bank can use it to resell the goods to another customers
D. The buyer can use it to negotiate a price with a negotiating bank
41. Which type of payment is the most advantageous for the exporter
42. 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
A. Payment mode, timing, place, delay and result of delay
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. Result and non-excusable delay in payment and time of payment.
44. Defects include
A. Mistakes
B. Materials
C. Fair wear and tear
D. Misuse
45. What of these do not count as defect
A. Defective design
B. Misuse
C. Defects materials
D. Defects workmanship
46. Dawson bought vanilla beans from Indonesia. Dawson instructed American bank
to open a letter of credit. One of requirement shipping documents was a certificate
and quality issues by experts. The bank paid the exporter. The beans, when they
arrived, were rubbish. The certificate of quality was signed, however, by only one
expert. Could the bank collect from Dawson the money it had paid to the
exporter?
C. No, it couldnt
47. Why can a manufacturer sometime accept a loss on an export deal
B. His factory may by short of work
C. He can get some export incentives from government
D. Any of the above
48. In which situation should the exporters use export credit insurance
A. Long- term customers
B. Transactions represent a high proportion of their turnover
C. Buyer are willing to spend money on a payment guarantee
D. In a sellers market
49. Normally, risk are transferred at the point of
A. Delivery
B. Payment
C. Arrival
50. Which of the following is not the reason why the exporter prefers a longer expiry
period of the credit
A. He wants to save bank charge
B. He wants enough time after delivery to present the document
C. He wants to have enough time to collect and discrepancies that be discovered

by the bank
D. He wants to spare some time for any unexpected thing preventing his
presentation of documents on times.
14
1. If the buyer can make certain assumptions about goods- even if the exporter give no
express warranty, these assumptions are called.
2. The entire agreement clause means that all documents are predate the contract
A. are still valid
B. become important
C. become invalid
D. can be used as evidence
A. the importer
B. the exporter
C. the agent
4. 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.
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.
5. 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 credit.
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 the credit.
6. 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.
7. The elmise covers General Average.

A. A
B. B
C. A, B, C
8. The bill of lading issued by the carrier for combined transport is called
B. Combined bill
9. Defects that come to light after buyer's acceptance are called
A. patent defects
B. latent defects
C. coherent defects
D. apparent defects
10. The bank noting the exporter that the letter of credit has been opened is called
A. The issuing bank.
B. The advising bank.
C. The confirming bank.
D. The opening bank.
11. The main difference between Continental and Anglo-American contract law is the
degree of
A. Codification
B. Formation
C. Automation
D. Interpretation
12. The answers to background questions are written
A. through the whereas-recital
B. through the annex
C. through provisions
D. through conditions
13. In a performance guarantee: if the seller works badly or not at all, the guarantor will
pay the buyer: within stated limits,
A. 100% of the loss of the beneficiary
B. the costs of the principal's failure to perform 710
C. the whole contract price (C va D sai)
D. between 5% and 10% of the contract price
A. A shorter warranty period.

B. Customer orders goods in one color.
C. No additional packaging or safety warnings are required beyond normal standards.
D. A longer warranty period.
15. If a contract is the entire agreement, earlier letters and documents
A. can be used as evidence
B. become invalid
C. prevail
D. remain important
16. In a contract, .can be incorporated into contract document clause.
A. letters
B. general conditions
C. the Incoterms
D. any of the above
17. Which of the following is left to the applicable law to regulate?
The notification period
B. The rectification period
C. The legal action period
D. The length of the defect liability period
18. When offer is made, it is not applicable when it has..?
A. Suspension
B. Renovation
C. Revocation
D. Adaptation
19. Continental law is also called..
A. Civil law
B. Common law
C. Legal system
D. Lawful case
20. Which countries require that all goods imported into the country are inspected by the
SGS immediately before shipment?
A. the USA
B. Vietnam
C. Indonesia
D. The UK
21. The answer to the questions of implies warranties are supplied by
A. The contract provision
B. The UCC
C. Most law
D. The contract
22. What happen if the issuing bank finds a problem with the documents and refuses to
A. The advising bank has to suffer that loss due to their carelessness in checking
shipping documents
B. The advising bank gets money back from exporter
C. The payment from the advising bank to the exporter are always made with
recourse. The exporter
D. It is the responsibility of the issuing bank of paying back the advising bank in such
a case
23. The place of delivery (CIP, CIF) should not be confused with the of the goods
A. Departure
B. Destination
C. Transshipment
24. Partial invalidity clause can help to avoid problems with the contracts that
A. might infringe government regulations
B. violate the trade laws
C. discourage trade
D. both B and C
documentation and submit it to the bank is
A. agreement
B. verification
C. specification
D. compliance
26. a radio lacks the wires connecting to loudspeaker to the amplifier is an example of
A. defective design
B. defective material
C. defective workmanship
D. misuse by the buyer
27. Transfer of risk from seller to the buyer (incoterm 2000) CFR:
A. when the goods are at the sellers premise
B. when the goods are handed to the first carrier
C. when the goods across the ship rail
D. when the goods are on board
28. Feeble- minded people are legally unable to contracts

A. sign
B. decline
C. refuse
D. resign
29. Many export contracts cannot come into force due to
A. certain preconditions are not met
B. force major
C. late delivery
30. With a well- designed set of specifications, the seller can protect its and avoids cost
A. reputation
B. production
C. resolution
D. productivity
31. Is the any requirement that the air waybill shows the date of the flight?
A. No, there isnt
B. Yes. There is
C. never is there such requirement
D. No. it is an incorrect requirement because
33. If the price is quote FAS Osaka, who pays for the freight?
A. The shipper
B. The exporter
D. The buyer
34. The exporters right to cure any defects in his delivery is .. .
A. Out of question
B. Advantageous to him
C. Disadvantageous to him
D. Detrimental to him
35. Which of the following discrepancies is NOT problem with the Bill of Lading?
A. The bill of lading unclean
B. the bill of landing shows shipment between ports orther than those specified in the
credit
C. the description of the goods on the invoice and the description of the goods in
the credit are different
D. there is no endorsement if endorsement is necessary
36. Transfer of the risk from the select to the buyer (incoterm 2000): DDU
A. when the goods are at the buyers premises
C. when the goods across the ships rail
D. when the goods are on broad
37. 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
38. The disclaimer of warranty means:
A. the seller is liable for the goods
B. the buyer is denied of some of his normal night
C. the seller will make good any defect
D. contract prices would be far higher
39. A payment guarantee simply comits the bank to pay if the buyer defaults. The
payment guarantee is usually for .Of the contract price.
A. 100%
B. less than 100%
C. 10%
D. between 5% and 10%
40. The first step in negotiating a letter of credit is
A. incorporation
B. specification
C. agreement
D. verification
41. A contract is not enforceable if .. .
A. it is signed within power
B. it has a legal purpose
C. it has an illegal purpose
D. it has no purpose
42. The contract should regulate what happens if incoterm 2000 and the terms of the
contract conflict normally the ..prevails
A. incoterm
B. contract
C. incoterm and contract
43. What kind of inspection is particularly important for sophisticated items or capital
goods?
A. customs inspection
B. carriers inspection
C. per-delivery inspection
D. SGSs inspection
44. . Bill of lading found something wrong with the consignment.
A. clean
B. clear
C. Claused
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 credits value, not its full value
D. payment is still safe but it is delayed
46. A unilateral offer can be defined as:
A. an offer made of a promise in return for promise
B. an offer made of a promise in return for an act
C. an offer made of an act in return for an act
D. an offer made of act in return for a promise
47. A letter of credit can be either revocable or irrevocable . Few exporters will
accept a revocable letter of credit, so the plain expression letter of credit generally
means 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
C. right
D. right, because in the absence a clear indication.
48. One the bank has indicated the discrepancies, what can the export do?
A. the exporter can provide the missing paperwork or correct errors
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
49. 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
50. 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
D. it depend on the requirements in the letter of credit
15
1. The Vienna Sales Convention is also called
a. The Uniform Law of International sale
b. The Uniform Law on the Formation of contract for the international sale of
goods.
c. The United Nations Convention on Contracts for the International sale of
goods
d. The United Nations Convention on Contract for acceptance.
2. In order to produce perfect products, manufacturers need to have
a. Product insurance
b. Quality assurance program
c. Customer satisfaction
d. Defect liability period
3. To make sure the officer signing the contract has authority to sign the contract,
a. The duplicate of signature
b. The authenticity of signature
c. The coverage of signature
d. The transferability of the signature
4. When the goods arrive, if they are., the importer can reject them, but if they
specification, he is obliged to accept them.
a. Defective/ conform to
b. Perfect/ conform to
c. Defective/ differ from
d. Perfect/ differ from
5. An annual flooding of the River Verb ruins some of the jute intended for use in
making sack
a. Yes
b. Questionable
c. No
6. In settlement by acceptance, what will the bank do after receiving the documents
and draft drawn 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 terms of the letter of credit.
c. The bank checks the documents
d. The bank agrees to pay the bill when it matures.
7. Which of the following of the 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 clear
figure stated in the amount of the credit.
8. Most contract contain an assurance that the exporter will any defects in his
products
a. Make good
b. Take away
c. Alter
d. Modify
9. The risk of rough handling is not covered under the cargo clause
a. A
b. B
c. C
d. B and C
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
d. The seller presents the necessary documents to the reconfirming bank
11. Shortage of supplies
a. Yes
b. Questionable
c. No
12. original(s) Bill of lading constitute(s) a full set
a. 1
b. 2
c. 3
a. The exporter
b. The carrier
c. The buyer
d. The forwarding agent
a. Yes
b. Questionable
c. No
15. Which of the following examples is a latent defect
a. Missing parts
b. Structural weakness
c. Wrong items
d. Broken items
16. Small purchases in private life are often in the form of
a. Cash on delivery
b. Cash against invoice
c. Cash with order
d. Any of above
17. The answer for the questions of implied warranties are supplied by
a. The contract provisions
b. The UCC
c. Most laws
d. The contract
18. An FOB sales contract agree that the exporter can deposit the goods in a
warehouse it the ship arrives late and that this counts as delivery. If the letter
requires 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
c. The buyer refuses to pay the exporter against a warehouse receipt.
d. The buyer still has to pay the exporter against a warehouse receipt because
his designated vessel has arrived late at the port of loading.
19. Whereas-clauses
a. Are provisions
b. Are promises
c. Are conditions
d. Are not provisions, promises or conditions
20. A volcanic eruption buries the factory in ash
a. Yes
b. Questionable
c. No
21. 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. Enforces the rest
22. Some contract set a cut-off date after which the contract
a. Is binding
b. Is effective
c. Cannot come into force
23. Quality assurance and customer satisfaction are the same issues for customer
a. In domestic market
b. In overseas market
c. Both A and b
d. Neither A nor B
24. In a confirmed letter of credit, what happen if the bank pays the exporter and the
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 credit.
d. The confirming ban has paid the money to the exporter and has no way of
recovering it. The confirming bank must pay the exporter without
recourse.
a. Credit by sight payment
b. Credit by deferred payment
c. Credit by acceptance
d. Credit by negotiation
26. Who issues ocean bill of lading
a. Captain
b. Exporter
c. Shipping company
d. Agent
27. An offer is not always, in international practice, the first move in forming a
a. Contract
b. Refusal
c. Decline
d. Renovation
28. 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
isby
a. Excused/force majeure
b. Not excused/force majeure
c. Excused/ acts of god
d. Excused/ contingencies
29. 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 until and reject the rest
d. All the above
30. Why do most exporters offer a discount for early payment, for example a 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 his cash flow
d. Because the exporter just wants to get payment on delivery
31. Anglo-American law does not bring the to all cases
a. Differences
b. Uniformity
c. Variations
d. Different solutions
a. A
b. B
c. A,B,C
33. 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
34. Among a number of international bodies offering arbitration services, the in
Paris is the most prestigious
a. UCP
b. ADR
c. ICC
d. FAO
a. Even when they lacks power
b. That is beyond its power
c. Both a and b
d. That is within its power
36. 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
c. CFR Nairobi
37. When the exporter fills in the letter 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 buyers bank.
c. It means the exporter is double guarantee 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.
38. Door to door service is offered. Which term should be used?
a. DDP
b. CIP
c. CIF
39. To avoid the danger of slow payment. Exporter 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 buyers bank transfers funds
d. Funds research the sellers bank account and at his full disposal
40. The has no power to enforce his solution to bind his parties, his task is to
suggest a fair solution only.
a. Judge
b. Conciliator
c. Magistrate
d. Lawyer
41. Inspection of the goods by the buyer in the manufacturers factory is referred to
as:
a. Inspection by inspection service
b. Pre-delivery inspection
c. Post-delivery inspection
d. Customs inspections
42. discharge a contract when one part faces an excessive burden in complying
with the contract
a. Suspension and non-performance
b. Frustration and impossibility
c. Disruption and prevention
d. Suspension and acceptance
a. The buyers account
b. The exporters account
c. The issuing banks account
d. The one who asks for such amendments
44. Transfer of risk from the seller to the buyer (Incoterm 2000): DAF
a. When the goods are at frontier
45. To avoid confusion, many contract drafters use instead of warranty
a. Guarantee
b. Warrantee
c. Legal responsibility
d. Defect liability
46. Every contract is governed by
a. Common law
b. Vienna convention
c. Applicable law
d. Civil law
47. When there are words like about or approximately in the letter of credits
amount, how much can the actual payment be?
a. The actual payment therefore can be 10% more or 10% less than the
stated amount.
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.
48. As for Anglo-American law, the decision of the judge is always
a. Predictable
b. Foreseeable
c. Unpredictable
d. Estimated
49. The warrantor is always a..
a. Bank
b. Insurance company
c. Both A and B
d. Neither A nor B
50. The Incoterm contains 13 terms
a. 1990
b. 2000
c. 2010
d. 1990 and 2000
16
1. After making the shipment of the goods to the buyer, the exporters present
shipping documents to....
A. The issuing bank
D. The opening bank
bank to open a letter of credit. One of the required shipping documents was a
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 couldnt
D. No question it could
4. In international practice, problems of assignment of rights and delegation of duties
can be reduced by using....
A. Prior written consent of the other party
B. Prior conversation of the other party
C. Prior consultation of the other party
D. Prior talk to the other party
5. The lump-sum compensation is set too low...
B. Quasi indemnity
C. Penalty
6. The advantages of arbitration are...
B. Lengthy and open
D. Time-consuming
7. ........refer(s) to the questions of implied warranties
A. Most contracts
B. Most laws
C. The UCC
D. The Vienna Sales Convention
8. There are ...parties to a warranty and ....in a guarantee
A. Three/two
B. Three/three
C. Tow/three
D. Two/two
9. It is common to put the definition clause .....of the contract
A. At the beginning
B. Near the beginning
C. At the end
D. Near the end
10. A contract requiring the exporter the send the contract goods by road from Kenya
to Zambia with freight paid by the exporter
A. CFR Lusaka
B. CPT Lusaka
C. CFR Nairobi
11. The lump-sum compensation is set about right...
B. Quasi indemnity
C. Penalty
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
D. To confirming bank has paid the money to the exporter and has no way of
recovering it. The confirming bank must pay the exporter without
resource.
13. Which of these does mot count as a defect
A. Defective design
B. Misuse
14. Transfer of risk from the seller to the buyer (Incoterm 2000) CIP
A. when the goods are at the sellers premises
15. Many export contracts can not come into force due to
A. certain preconditions are not met
B. Force majeure
C. late delivery
16. If the price is quoted CIF San Francisco, who pays for the insurance and freight
A. the exporter
B. the buyer
C. the forwarding agent
D. the confirming bank
17. Which is the most appropriate method of payment for the exporter in the
following case? Sale of a bale (roll) of cloth costing $200 to a nearby tailors shop
with whom you have done business for 20 years
A. Confirmed letter of credit
B. open account with no security
C. open account with bank guarantee
D. open account with export credit insurance
18. The disadvantage of ....policy is that it is set up for particular time and
automatically expires
A. tailor-made
B. floating
C. open cover
19. Which of these does not require prior inspection by SGS
A. The Philippines
B. Indonesia
D. All A, B and C
20. a promise by the exporter to cure defects in his product is called:
A. a product guarantee
B. a product warranty
C. a product insurance
D. a product certification
21. the entire agreement provision means... must be established within the contract
itself
A. the background of the contract
B. important letters and memoranda
C. contract documents
D. all of these
22. export credit insurance is a kind of special privilege that an exporter may get
from his governments export incentives and support. Right or wrong?
A. complete right
B. absolutely wrong
C. neither right nor wrong
D. it is not a charity. It is beneficial for both exporter and insurance company
23. In a contract under a Continental law, a recital.....
A. is essential
B. is not useful
C. is not essential
D. is important
24. small purchases in private life are often in the form of.....
A. cash on delivery
B. cash against invoice
C. cash with order
D. any of the above
25. the bill of lading issued by the carrier for the sea transport is called
A. seaway bill
B. marine bill of lading
C. sea way bill
26. ........bill of lading goods were taken on board in good condition
A. clean
B. dirty
C. claused
27. 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
D. an invitation to the other party to accept an offer
28. the bank that the buyer asks to open a letter of credit is called......
A. the issuing bank
B. the advising bank
C. the confirming bank
D. the opening bank
29. 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
30. transfer of risk from the seller to the buyer (Incoterm 2000): FAS
A. when the goods are ex-quay
31. Anglo-American law is also called.....
A. common law
B. civil law
C. law code
D. legal code
32. bill of lading is the most important document because it is a....
A. document of title
B. document of negotiation
C. document of freight
33. payment guarantee means....
A. a bond
B. a surety
C. a warranty
D. a triangle relationship among guarantor, principal and beneficial
34. the main difference between Continental and Anglo-American contract law is the
degree of
A. Codification
B. Formation
C. Automation
D. Interpretation
35. if the box With brief advice by teletransmission is crossed, it means....
A. the exporter wants to be informed of the issuance of the letter of credit by

telex
B. the exporter wants to begin preparation for delivery
C. the buyers 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 letter of credit more
quickly
36. 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
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
37. The Incoterm.....contains 13 terms
A. 1990
B. 2000
C. 2010
D. 1990 and 2000
A. DDP
B. CIP
C. CIF
39. Drunken people have no.....to sign a contract
A. contractual capacity
B. contractual concept
C. contractual government
D. contractual branch
40. 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 buyers bank transfers funds
C. when the buyer instructs the bank to pay
D. when the funds reach the sellers bank account
assumptions are called (by lawers):
A. express warranties
B. negotiable warranties
C. implied warranties
D. implied guarantee
42. An offer is not always, in international practice, the first move in forming a....
A. contract
B. refusal
C. decline
D. renovation
43. How many timing problems are there in the defect liability period?
A. one
B. two
C. three
D. four
A. the deal is total loss for the exporter
B. the exporter takes back the whole shipment
C. the exporter makes a small profit
D. the deal is total loss for the importer
45. The guarantor is usually a....
A. bank
B. insurance company
C. both A and B
D. neither A nor B
46. Which of the following examples is latent defect?
A. missing parts
B. structural weaknesses
C. wrong items
D. broken items
47. If both parties perform their duties exactly according to the contract, the contract
is.....
A. discharged by performance
B. discharged for performance
C. discharged to performance
D. discharged with performance
48. 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 the above
A. documents are not presented within the required time
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
50. The court of arbitration applies whatever........the parties stipulate in the contract
A. international law
B. corporate law
C. national law
D. business law
17
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?
D. The exporter will be paid - although later action in the courts may oblige him to
make good any damage he caused the buyer
2. In contracts, ...... is not normally allowed
A. Delegation of duties
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
B. By airmail
C. By mail
4. "A machine that consumes more fuel than specifications" is an example of
A. Latent defect
B. Patent defect
C. Inherent defect
D. Apparent defect
5. Which of the following discrepancies is not the problem with the Letter of Credit?
6. The parties to a contract are not always required to... the Vienna Sales Convention
A. Ignore
B. Apply
C. Refuse
D. Decline
7. Defects may be which of the following?
C. Both
D. None of these
A. Liquidated damages.
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.
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
11. Which of these counts as a defect
A. wrong design
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
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
14. 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
15. In order to produce perfect products, manufacturers need to have.......
A. product insurance
B. quality assurance programs
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
C. When the goods across the ship's rail
parties should check...
documentation and submits it to the bank is.....
A. Agreement
B. Verification
C. Specification
D. Compliance
19. Feeble-minded people lack.... to enter contracts
A. money
B. time
C. contractual capacity
D. intelligence
20. Of the three options available for setting disputes, litigation before the court is
internationally least attractive as it is...
B. Business - like and flexible
21. Elderly people are... to deal with a contract
A. Unable
B. Able
C. Impossible
D. Unaffordable
22. A grace period sometimes used to...
A. avoid penalty
B. facilitate early delivery
C. avoid liquidated damages
23. Inspection by... reveals discrepancies in quality
A. customs officers
B. the carrier
C. the exporter
D. the importer
24. IN a contract, the word "whereas" means....

A. "only that"
B. "while"
C. "when"
D. "because" or " considering that"
25. Disclaimer of warranty often accompanies
A. Contracts for hardware
B. Contracts for footwear
C. Contracts for glassware
D. Contracts for software
26. What does prompt payment of the letter of credit depend on?
A. It depends on the presentation of correct documentation of the exporter
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
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.

29. The essence of Continental Law is....
A. Codification
B. Verification
C. Authentication
D. Ratification
A. Yes
B. Questionable
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
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?
D. It depends on the requirements in the letter of credit

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
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 standards
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.
C. Defect in design
contract. This is called...

C. Implied warranty of mechantability
38. If the price is quoted FAS Osaka, who pays for the freight?
A. The shipper
B. The exporter
D. The buyer
39. When the Bill of lading marked "freight prepaid. Who pays for the freight?
A The Buyer
B. The Seller
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
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
42. A bank guarantee which gives the exporter an acceptable level of security in terms of
payment shall be paid by...
A. The buyer
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....
44. "Door to door service" is offered. Which term should be used?
A. DDP
B. CIP
C. CIF
45. With a well-designed set of specifications, the seller can protect its....
A. reputation
B. production
C. resolution
D. profitability
46. The best solution for the exporter to make late payment impossible is....
seller shall be entitled to receive in case of late payment
guarantee
D. A confirmed, irrevocable, at sight letter or credit.
47. A contract requiring the exporter to send the contract goods by road from Keyna to
A. CFR Lusaka
B. CPT Lusaka
C. CFR Nairobi
48. It is common to put the definition clause..... of the contract
A. at the beginning
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.
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
C. Where the money must be before payments is considered complete and what delay in
D. Results of non-excusable delay in payment and time of payment
18
Cu 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.

Cu 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 sellers premises.
B.
When the goods are handed to the first carrier.
C.
When the goods across the ships rail.
D.
When the goods are on board.
Cu 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.
Cu 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 credits 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.
Cu 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.
B.
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 sellers premises.
B.
When the goods are handed to the first carrier.
C.
When the goods across the ships 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.
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
Cu 26:
The point at which money is deaamed to be paid most preffered by the seller.
C. When the buyers instructs the bank to pay
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
Cu 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
D. Defect liability period
Cu 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 buyers bank
C. Its mean the exporter double quaranteed in term of payment by the third bank beside the
D. Its mean the confirmation from the issuing bank interms of payment in case the buyer
defauts
Cu 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
Cu 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
Cu 32. Which of the following examples is a talent defect?
A. Missing parts
B. Structural weakness
C. Wrong items
D. Broken items
Cu 33. A contract that is ultra vires is
A. Well Enforceable
B. Unenforceable
C. Valid
D. Effective
Cu 34. The main difference between Continental andAnglo- American contract law is the
degree of
A. Codification
B. Formation
C. Automation
D. Interpretation
Cu 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
Cu 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 to the ICCs rules
C. Right
D. Right, because in the absence of a clear indication, letter of credit are deemded to be
irrevocable
Cu 37. The word cash in international trade means..

A. Coins and notes
B. Gold

D. Prepayment
Cu 38. Whck of these does not require prior inspection by SGS?
A. The philippiness
B. Indonesia
D. All A, B, C
Cu 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
Cu 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
Cu 41. Transfer of risk from the seller to the buyer ( Incoterm 2000). FOB
A. When the goods are at the seller premises
Cu 42. In negotiating specification, conflict can arise
A. Within the importers own team
B. Between the importer and the exporter
C. Between the exporters own team

D. All of the above
Cu 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
Cu 44. Another name for Tender Guarantee is

A. Revocable guarantee
B. Bid Guarantee
C. Bond guarantee
D. Bid bond
Cu 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
Cu 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
Cu 47. The first step in negotiating a letter of credit is
A. Incorporation
B. Specification
C. Agreement
D. Vertification
Cu 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.
C. Affects the rest
D. Enforce the rest
Cu 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
19
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
A.
B.
C.
D.
A.
1. What happens if the issuing bank finds a problem with the documents and refuses to
The advising bank has to suffer that loss due to their carelessness in checking the
shipping documents
The advising bank gets its money back from the exporter
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.
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
Reputation
Production
Resolution
profitability
3. The cheapest mode of transport:
By sea
by air
by road
4. What is transferable credit ?
It is the kind of credit which allows the exporter to transfer his right as the credits
It is the kind of credit which allows the first beneficiary to request the confirming
It is the kind of negotiable document with which the exporter can endorse for any third
party
It is the kind of credit with which the buyer will not necessarily know who is the actual
consequential loss or damage is often..
Agreeable
B. Controversial
C. Non-negotiable
D. Amicable
A. Three/two
B. Three/three
C. Two/three
D. Two/two
7. How many types of implied warranties are there ?
A. Two
B. Three
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 buyers country
D. All of the above
9. A contract comes into force when an offer is made by one side and by the other
A. Accepted
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
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
D. Buyer instructs issuing bank to instruct any third bank to pay under the letter of
12. Many export contracts cannot come into force due to :
A. Certain preconditions are not met

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
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
D. Estimated
15. Among a number of international bodies offering arbitration services, the in Paris is
A. UCP
B. ADR
C. ICC
D. FAO
16. Defects such as wrong items, broken or missing parts, scratches, and so on are
called
A. Patent defects
B. Latent defects
C. Inherent 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
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
C. Confirming bank
D. Any third bank
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
19. In a contract under a Continental law, recital

Is essential
Is not useful
Is not essential
Is important
20. Full set on board ocean bills of lading to order shipper, blank endorsed. In this
Exporter
Importer
bank
A or B or C. it depends on situation
21. As soon as the exporter receives advice that the letter of credit has been opened, what
should he do ?
He should check that it complies with the agreement he negotiated with the buyer
He should check if there is any document that he does not understand
He should check if there is any requirement that he does not agree to
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
Defective design
Defective materials
Misuse by the seller
23. The order of precedence among the documents explains
The authority of the documents
The meaning of the documents
The value of the documents
D. The assignment of the documents
24. Why can a manufacturer sometimes accept a loss on an export deal
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 )
25. Partial invalidity clause can help to avoid problems with contracts that..
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
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.
28. If the price is quoted CPT Vancouver, who pays for the freight ?
A. The exporter
B. the forwarding agent
C. the buyer
do Other documents include ?
A. certificate of origin
B. Certificate of inspection
C. a health inspection
D. any of the above
been preparing legislation on this subject for five years
A. yes
B. questionable
C. No
31. Its 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
D. in the delivery clause
32. A ban is issued on the export of jute products by newly elected government
A. yes
B. questionable
C. no
33. When the bill of lading marked freight prepaid. Who pays for the freight
A. the buyer
B. the seller
C. the agent
D. it depends on the agreement
34. Anglo-American law is
A. law code
B. case law
C. civil law
D. legal code
35. Which of the following examples is a latent defect ?
A. missing parts
B. structural weaknesses
C. wrong items
D. broken items
36. The applicable law governs questions concerning the validity,., performance of
contract
A. interpretation
B. payment
C. correction
D. Acceptance
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
38. Transer of risk from the seller to the buyer ( Incoterm 2000): CIF
A. when the goods are at the sellers premises
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

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
D. implied warranty of fitness for intended purpose
41. When parties agree to end a contract, .occurs
A. termination
B. frustration
C. rescission
D. suspension
42. Who issues ocean bill of lading ?
A. captain
B. exporter
C. shipping company
D. agent
A. even when they lack powers
B. that is beyond its power
C. both A and B
D. that is within its power
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
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
45. Which of the following is essential to successful business ?
A. quality
B. customer satisfaction
C. correct making and packaging
D. on-time delivery
A. Payment mode, timing, place, delay and result of delay
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..

48. Termination for default occurs when the contract names certain .which allow one
side to terminate
A. time limits
B. defaults
C. situations
D. conditions
49. What can protect both the exporter and importer in an export contract ?
A. a well-designed set of specifications
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
B. air bill of lading
C. air way bill of lading
D. airway bill
20
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
1. A contract comes into force when an offer is made by one side andby the other
Accepted
Declined
Written
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 ?
It means the exporter wants the bank in his country merely handle the paperwork
It means the exporter wants the bank in his country make the payment itself and
recover the funds from the buyers bank
It means the exporter is double guaranteed in terms of payment by a third bank beside the
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 ?
settlement by sight payment
settlement by deferred payment
settlement by acceptance
Settlement of negotiation
4. The mechanism of a confirmed letter of credit works as follow:
Buyer instructs issuing bank to issue letter of credit in favor of the seller
Buyer instructs issuing bank to instruct advising bank to pay under the letter of credit in
favor of the seller
Buyer instructs an issuing bank to instruct a confirming bank to pay under a letter
of credit in favor of the seller
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:
How many arbitrators sit in the court ?
What is the language of the court ?
Where is the place of the court ?
All of the above
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.
B.
C.
D.
and
or
and/or
either B or C
7. Which of the following examples is a patent defect ?
A. crushed or stained garments
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 bank
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
10. In contract negotiation, an invitation to provide terms and condition may mean:
A. another name for acceptance
B. another name for an offer
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
12. The bank that the buyer asks to open a letter of credit is called:
A. the issuing 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
A.
B.
C.
D.
C. rectification period
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
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
C. Compliance
D. verification
16. If the price is quoted CFR HaiPhong, who pay for the freight ?
A. the buyer
B. the exporter
C. the carrier
D. the forwarding agent
A. captain
B. exporter
C. shipping company
D. agent
18. Why do few exporters ask for bank guarantees as security for payment ?
Because they are not expensive to set up
Because they run into trouble so often
Because they are conditional guarantees
Because the letter of credit is much preferred
A. acceptance
B. agreement
C. adoption
D. revocation
20. The place of delivery ( CIP, CIF ) should not be confused with theof the goods
A. departure
B. destination
C. transshipment
21. When there are words like about or approximately in the letter of credits amount,
how much can the actual payment be ?
A. the actual payment therefore can be 10% more or 10% less than the stated
amount
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 noto sign contract
A. contractual capacity
B. contractual concept
C. contractual government
D. contractual branch
A. agreeable
B. controversial
C. non-negotiable
D. amicable
24. How many timing problems are involved in Defect Liability Period ?
A. three
B. four
C. two
D. five
that required documentation is as agreed is:
A. agreement
B. incorporation
C. veritification
D. compliance
A. the bank will cite a discrepancy, some aspect of the documentation that is
not in line with the terms of the credit
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
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
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
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
C. confirming bank
D. opening bank
32. ..are the explanations
A. definition clauses
B. whereas-recital clauses
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,
designated vessel has arrived late at the port of loading
34. .refer to the questions of implied warranties
A. most contracts
B. most laws
C. the UCC
D. the Vienna Sales Convention
wrong ?
A. completely right
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
37. Continental law copes with
A, personal problems
B. international trade
C. national issues
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
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
A. yes
B. questionable
C. no
40. If the price is quoted FOB Singapore, who pays for the insurance and freight ?
A. the exporter
B. the buyer
C. the forwarding agent

41. The disadvantages ofpolicy is that it is set up for particular time and automatically
expires
A. tailor-made
B. floating
C. open cover
A. independent inspection
B. inspection of goods prior to shipment
C. open package inspection
D. customs inspection
43. Nuts and bolts are inadequately tightened represents:
A. defective materials
B. defective design
D. misuse
Zambia with freight paid by the exporter:
A. CFR Lusaka
B. CPT Lusaka
C. CFR Nairobi
45. Most contracts contain an assurance that the exporter will..any defects in his
products
A. make good
B. take away
C. alter
D. modify
46. The delivery depends on..
A. date of execution
B. effective date
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 buyers country
D. all of above
48. Among a number of international bodies offering arbitration services, thein Paris is
A. UCP
B. ADR
C. ICC
D. FAO
49. The names ofare normally the full, registered name of the Company
A. the exporter
B. the buyer
C. either the exporter or the buyer
D. the parties
50. The parties to a contract are not always required to. The Vienna Sales Convention
A. ignore
B. apply
C. refuse
D. decline
21
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
1. Anglo- American law is also called:

Civil law
Legal code
Common law
Law code
2. The first step in negotiating a letter of credit is:
Incorporation
Specification
Agreement
Verification
3. A mistake about the goods in a contract means there no..
Meeting of acceptance
Meeting of minds
Meeting of concepts
Meeting of agreement
4. Is it possible for the beneficiary (exporter) sometimes, though not often, to make a
D. No. it isnt
E. It is impossible by all mean
F. The draft must be drawn on the buyer to the order payment not the bank
E. Yes, it is
A.
B.
C.
D.
A.
B.
C.
D.
A.
5. A contract that is ultra vires is.

Well enforceable
Unenforceable
Valid
Effective
6. Most contracts contain an assurance that the exporter will .. any defects in his
products
Make good
Take away
Alter
Modify
Obtaining loans
C. Credit purchase
D. Profit making
8. Its 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
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 buyers bank transfers funds
D. Funds reach the sellers bank account and at his full disposal
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.

Codification
Verification
Authentication
Ratification
11. Allowing the buyer to repair the equipment at the exporters cost ..
Is always the best choice to the exporter
Is always the worst choice to the exporter
Is often safe for exporter
Is often unsafe for exporter
12. A contract comes into force when an offer is made by one side and by other
Accepted
Declined
Written
Drawn
13. Termination may be for..
Disruption
Authentication
Convenience
D. Adoption
wrong?
A. Completely right
B. Definitely wrong
C. It depends
lading?
A.
It is possible demand
B.
The original of the bill of lading for shipment by rail does not come into the
C.
Such a letter of credit is certain to cause delay in payment
A.
B.
C.
A.
B.
C.
D.
E.
F.
G.
H.
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)
Yes
Questionable
No
17. Who usually pays for curing defects?
The importer
The exporter
Both parties
A third party
18. Elderly people are to deal with contract
Unable
Able
Impossible
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.
B.
C.
D.
Revolving L/C
At sight, confirmed L/C
Deferred, irrevocable L/C
Transferable L/C
E. Quality
F. Customer satisfaction
G. Correct marking and packaging
H. On-time delivery
A.
B.
C.
D.
21. Different legal systems regulate that rejection of delivered goods must be total
can be partial.
Or
And
And/or
Nor
is.
E. Discharged by performance
F. Discharged for performance
G. Discharged to performance
H. Discharged with performance
A.
B.
C.
A.
B.
C.
force majeure)
A fire burns down the factory
Yes
Questionable
No
24. The grace period is sometimes used to ..
Avoid penalty
Facilitate early delivery
Avoid liquidated damages
E. The duplicate of the signature
F. The authenticity of the signature
G. The coverage of the signature
H. The transferability of the signature
E. A shorter warranty period
F. Customer order goods in one color
G. No additional packaging or safety warnings are required beyond normal standards
H. A longer warranty period
27. The disadvantage ofpolicy is that it is set up for particular time and automatically
expires.
D. tailor made
E. floating
F. open cover
28. .. is opened-ended
A. Tailor-made
B. Floating
C. Open cover
A.
B.
C.
A.
B.
C.
The issuing bank
The advising bank
The confirming bank
D. Any third bank
30. Delivery of the goods under the most export contracts take place in a country of :
The importer
The exporter
The agent
31. The stand-by letter of credit originated in the US is used there because
E. It is very popular for US exporters to ask for payment from their buyers or customers.
F. It is much more convenient to ask for one in the US instead of the ordinary letters of
credit.
G. The banking law in some states forbids banks to issue payment guarantee
H. English banks prefer to issue demand guarantees and ordinary letters of credit.
A.
B.
C.
D.
E.
32. The method of payment which is dangerous for the exporter is:
Cash on delivery
Accepting a personal check
Prepayment
Export credit insurance
33. Another name for tender guarantee is
Revocation guarantee
F. Bid guarantee
G. Bond guarantee
H. Bid bond
34. .bill of lading- goods were taken on board in good conditions
A. Clean
B. Dirty
C. Claused
force majeure)
A volcanic eruption buries the factory in ash
A. Yes
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
D. Can be used as evidence
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
E.
37. A guarantee is:

A Unilateral
B. Tripartite
C. Bilateral
D. Multilateral
38. When the bill of lading marked freight collected. Who pays for freight?
The buyer
The seller
The agent
It depends on the agreement
39. The greatest fear for the exporter is :
Being unable to meet the delivery deadline
Being unable to meet the specification of the goods
Being unable to get paid for the goods sold
Having no guarantee for payment
40. If shipment is made on CIF or CPI terms, the letter of credit will call for
An insurance policy
F. A letter of insurance
G. A certificate of insurance
H. Either A or C
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
41. The final quality hurdle is the .. during which the exporter is liable to cure
defects that come to light in the goods.
Guarantee period
Defect liability period
Correction methods
Quality assurance requirements
42. Earthquake, volcanic eruption and lighting are not covered under the cargo clause .
A
B
C
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?
The UCC
The BGB
Continental law
English law
A.
B.
C.
A.
B.
C.
A.
B.
C.
D.
E.

B. quasi indemnity
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.
C and F
D and F
C and D
46. Export credit insurance is very attractive; however, it has certain limitations like .
High premium paid by the exporter
Long time waiting for compensation from the insurance company
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.
Refusal from the insurance company to quote premiums due to risky business or the
buyers non- creditworthiness.
Credit by sight payment
F. Credit by deferred payment

G. Credit by acceptance
H. Credit by negotiation
A.
B.
C.
D.
A.
B.
C.
D.
48. Transfer of risks from the seller to the buyer ( Incoterm 2000) : CPT
When the goods are at sellers premises
When the goods are handed to the first carrier
When the goods across the ships rail
When the goods are on board
Notification
Rectification
Legal action period
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
E. 100%
F. Less than 100%

G. 10%
H. Between 5% and 10%
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
C. Continental law
D. English law
2. Bill of lading is the most important because it is a..
A. Document of title
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 buyers goodwill
B. Keeping this promise
C. Negotiating detailed specifications
D. Making profit
4. In a contract under a Continental law, a recital.
A. is essential
B. is not useful
C. is not essential
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
C. the return of the goods and refund of the price
D. non of these
impossible specifications isin business
A. lucrative
B. risky
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
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
wrong?
A. Completely right
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 tothe Vienna Sales Convention
A. Ignore
B. Apply
C. Refuses
D. Decline
11. What does3/3 Marine Bill of Lading mean?
A. It means the exporter must produce three originals and three copies of the marine
bill of lading
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
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
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
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
15. Which of the following discrepancies is NOT the problem with Insurance
A. Documents are not presented within the required time
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
17. Contract documents must be given.in case of contradictions
A. an order of seniority
B. anorder of precedence
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
D. Estimated
parties should check..
20. The cheapest mode of transport is
A. by sea
B. by air
C. by road
A. liquidate damages
B. quasi indemnity
C. penalty
22. The cost of L/C amendments are normally for.
A. the buyers account
B. the exporters account
C. the issuing banks account
D. the one who asks for such amendments
23. According to the UCC, how long is the legal action period?
A. Two years
B. Three years
C. Four years
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
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
26. Open cover is not a policy: the.will write a policy if required
A. Insurer
B. Importer
C. Exporter
27..refer(s) to the questions of implied warranties
A. Most contracts
B. Most laws
C. The UCC
Zambia with freight paid by the exporter.
A. CFR Lusaka
B. CPT Lusaka
C. CFR Nairobi
29. A grace period is sometimes used to.
A. avoid penalty
30. Which of these does not count as a defect?
A. Defective design
B. Misuse
31. Partial invalidity clause can help to avoid problems with contracts that
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.
D. Either A or C
33. Is there any requirement that the air waybill shows the date of the flight?
A. No, there isnt
B. Yes, there is
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
C. Incoterm and contract
35. In CIF and CIP contracts, must pay for insurance from the point of delivery to the
A. The exporter
B. The importer
C. The carrier
36. The disadvantagesof policy is that it is set up for paticular time and automatically
expires
A. tailor-made
B. floating
C. open cover
37. Defects may be which of the following?
C. Both
D. None of these
payment procedure in motions is.
A. The issuing bank
D. Any third bank
A. Mode of payment, timing, place of payment
B. Delay in payment and results of delay
D. Delivery, payment and warranty terms
40. .Bill of lading-goods were taken on board in good condition.
A. clean
B. dirty
C. claused
A. Law code
B. Case law
C. Civil law
D. Legal code
42. The decision of arbitrators is
A. Law-oriented
C. Action-oriented
43. Export credit insurance is a kind of special privilege that an exporter may get from
his governments 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
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
C. The buyers 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
buyer may.
A. reject the whole
B. accept the whole
D. All the above
46..is two-sided procedures
A. Termination
B. Cancellation
C. Rescission
D. Suspension
47. Transfer of risk from the seller to the buyer ( Incoterm 2000 ): CPT
A. When the goods are At the sellers premises
48. In a contract, the word whereas means.
A. only that
B. while
C. when
D. because or considering that
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
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 eighttrack 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?
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.
23
1. Title to the goods passes
A. With risks
B. Without risks
C. With documents
2. Partial invalidity clause can help to avoid problems with contracts that
A. Might infringe government regulations
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 time
C. Weights differ between two documents
D. Marks and number differ among documents
4. Drunken people have no to sign a contract
5. Cancellation on grounds makes no legal sense
A. Great
B. Genuine
C. Trivial
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
C. Magistrate
D. Lawyer
draft on the buyer from the seller?
B. The bank will pay the seller as long as the documents submitted comply with all the
terms of the letter of credit
D. The bank agrees to pay the bill when it matures
8. Full set on board ocean bills of lading to order shipper, bank endorsed. In this
A. Exporter
B. Importer
C. Bank
D. A or B or C. it depends on the situation
9. A bill of lading with the note is
B. Clause bill of lading
10. The exporter should have no liability for the goods when they are
A. Beyond his control
B. In his control
C. Under his control
11. Export credit insurance which gives the exporter an acceptance level of security in
A. The buyer
B. The exporter
C. A bank
12. If a contract is the entire agreement, earlier letters and documents
B. Become invalid
C. Prevail
D. Remain important
13. Shortage of supplies (Background: the exporter cannot get the raw jute he needs from
A. Yes
B. Questionable
C. No
14. If a dispute arises, the recital allows the court to discover the real meaning of
A. The contract
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
B. Cash on delivery
C. Cash against invoice
D. Cash with order
16. The applicable law governs questions concerning the validity, , performance of
contracts.
A. Interpretation
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
C. Excused/Acts of God
D. Excused/contingencies
18. Why can a manufacturer sometimes accept a loss on an export deal
C. Ha can get some export incentives from the government
D. Any of the above
A. Patent defects
B. Latten defects
C. Inherent defects
20. Transfer risk from the seller to the buyer (Incoterms 2000): DDP
D. When the goods are on board21.
A. Is essential
B. Is important
C. Is not useful
D. Is useful
22. A liquidated damages clause protects
C. Both sides
D. Neither the exporter nor the importer
A. The exporter
B. The buyer
24. Earthquake, volcanic eruption and lighting are covered under the cargo clause
A. A
B. B
C. C
D. A and B
A. The exporter
B. The importer
C. Both parties
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
contract. This is called
interest and the cost of any delay along the payment route properly belongs to
A. The buyer
B. The exporter
30. Which of these is the cheapest option for the exporter?
A. Repair
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
32. It is to identify latent defect than patent defect.
A. Easier
B. More complicated
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
D. None of these

35. Which of the following is NOT the method of issuing letter of the credit?
A. By email
B. By airmail
C. By mail
impossible specifications is in business
A. Lucrative
B. Risky
C. Advantageous
D. Common
37. In CIF and CIP contracts, must pay for insurance from the point of delivery to the
A. The exporter
B. The importer
C. The carrier
38. The decision of arbitrators is
A. Law-oriented
C. Action-oriented
39. The Vienna Sales Conventions is also called:

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
40. If a country ratifies the Vienna Convention, in the event of conflict, the Vienna Sales
Convention can the National law.
A. Prevail over
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
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
transport documents.
A. And
B. Or
C. And/or
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
D. There is no endorsement if the endorsement is necessary
45. Who signs shipped on board notation?
A. Captain
B. Exporter
C. Shipping company
D. Agent
A. The bank will cite a discrepancy, some aspect of the documentation that is not
line with the term of the credit
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
B. Guarantee period

A. Law code
B. Case law
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
payment shall be paid by
A. The buyer
B. The exporter
C. A bank
D. A third party
24
1. The point at which money is deemed to be paid most referred by buyer
is.
E. The exporter
F. The buyer
G. The forwarding agent
H. The confirm
3. Defects that come to light after buyers acceptance are called
E. Patent defects
F. Latent defects
G. Coherent defects
H. Apparent defects
4. Replacing a defective product helps to keep the of customer.
A. Goodwill
B. Good image
C. Good business
D. Wellbeing
D. Continue the contract
E. Terminate the contract
F. Make late delivery
6. Parties to contract for the sale of goods are free to choose.
A. Applicable law
B. International law
C. Corporate law
D. Business law
7. Which of the following is not the method of issuing the letter of credit?
E. By email
F. By airmail
G. By mail
H. By teletransmission
8. When an offer is made, it is not applicable when it has..?
A. Suspension
B. Renovation
C. Revocation
D. Adaptation
E. How many arbitrators sit in the court?
F. What is the language of the court?
G. Where is the place of the court?
H. All the above
10. Which corrective method is least favorable for the seller
e. Replace the wrong items
f. Reduce the price
g. Return the goods and refund the price
h. Repair the goods
11. happens when one party end the contract because of breach by the other
A. Cancellation
B. Suspension
C. Impossibility
D. Termination
E. patent defects
F. latent defects
G. inherent defects
H. concealed defects
13. In a guarantee, a guarantor is often:
E. The buyer
F. The seller
G. The bank
H. The manufacturer
transport documentation.
E. And
F. Or
G. And/or
H. Either B or C
E. the buyers account

F. the exporters account
G. the issuing banks account
H. the one who asks for such amendments
16. 'Door to door service" is offered. Which term should be used?
D. DDP
E. CIF
F. CIP
17. If a contract is an entire agreement, earlier letters and documents..
E. Can be used as evidence
F. Become invalid
G. Prevail
H. Remain important
18. Anglo-American law is also called..
A. Civil law
B. Legal code
C. Common Law
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
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.
C. The confirming bank.
D. The opening bank.
E. The buyer
F. The seller
G. The agent
H. It depends on the agreement
22. original(s) Bill of lading constitute(s) a full set

d. 1
e. 2
f. 3
23. The exporter must know the legal identity of the buyer that may arise.
A. Resolve payment problems
B. Settle disputes
C. Solve problems
D. All of these
draft drawn from on the buyer from the seller?
E. The bank will pay the seller immediately
F. The bank will pay the seller as long as the documents submitted comply with all the
terms of letter of credit.
G. The bank checks the documents
H. The bank agrees to pay the bill when it matures
E. The deal is a total loss for the exporter
F. The exporter takes back the whole shipment
G. The exporter makes a small profit
H. The deal is a total loss for the importer
26. Transfer of risk from the seller to the buyer ( Incoterm 2000) : DDU
E. When the goods are at the buyers premises
F. When the goods are handed to the first carrier
G. When the goods across the ships rail
H. 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
28. The workforce at the factory goes on strike ( force majeure)
D. Yes
E. Questionable
F. No
I. The credit has expired
J. Document required by the credit are missing

K. The credit amount is exceeded
L. Insurance cover is expressed in a currency other than that of the credit
30. Who usually pays for curing defects?
A. The buyer
B. The seller
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
32. A fire burns down the factory ( force majeure)
D. Yes
E. Questionable
F. No
D. Yes
E. Questionable
F. 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
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
E. Revocation guarantee
F. Bid guarantee
G. Bond guarantee
H. Bid bond
36. The parties to a contract are not always required to... the Vienna Sales Convention
E. Ignore
F. Apply
G. Refuse
H. 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
38. Why letters of credit are formally called documentary credits?
E. 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.
F. Because a letter of credit is issued by an issuing bank at the request of the buyer
G. Because in a letter of credit situation, documents are exchanged for money
H. 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
e. Disruption
f. Authentication
g. Convenience
h. Adoption
chosen will be.
A. Bank guarantee
B. Open account
C. Export credit insurance
42. In contract, partial invalidity provision means the invalidity of one part of the
contract
E. May invalidate the rest
F. Does not invalidate the rest
G. Affects the rest
H. Enforces the rest
43. Beside the commercial invoice, the transport document and the insurance document,
what does Other document include?
E. A certificate of origin
F. A certificate of inspection
G. A health inspection
H. Any of the above
E. The buyer
F. The seller
G. The agent
H. It depends on the agreement
45. The best solution for the exporter to make late payment impossible is
E. 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.
F. An agreement with the buyer to strengthen the payment provisions with a payment
guarantee
G. An agreement with an insurance company in case the buyer fails to pay on time
H. A confirmed, irrevocable, at sight letter of credit.
case? Sale of a bale (roll) of cloth costing 200 USD to a nearly tailors shop with
whom you have done business for 20 years.
E. Confirmed letter of credit.
F. Open account with no security
G. Open account with bank guarantee
H. Open account with export credit insurance
B. quasi indemnity
C. penalty
48. In terms of payment in international trade.
E. Risk rises and cost rises as well
F. Risk falls and cost falls as a consequence
G. Risk and cost have no relationship with each other
H. Risk and cost rise and fall together
49. Contract documents must be given.in case of contradictions
E. an order of seniority
F. an order of precedence
G. order of rules
H. either A or B
E.
F.
G.
H.
Verification
Authentication
Codification
Acceptance
25
1. The Vienna Sales Convention is also called:

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
A. The exporter
B. The importer
C. Both parties
D. Neither of these
buyer may.....
A. Reject the whole
B. Accept the whole
C. Accept any commercial unit and reject the rest
D. All the above
4. What kind of inspection is particularly important for sophisticated items or capital
goods?
A. Customs inspection
B. Carriers inspection
C. Pre-delivery inspection
D. SGSs inspection
A. The buyer
B. The seller
C. The agent
6. It is.......to identify latent defect
than patent defect
A. Easier
B. More complicated
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
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
B. And
C. And/or
D. Nor
9. Which of the following is NOT considered to be special requirement in a
sale/purchase contract?
B. Upgraded packaging materials
10. In settlement by sight payment......
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
12. Who issues a bank guarantee
A. The buyer
B. The exporter
C. Any third party
D. A bank
14. Feeble-minded people are legally unable to contract
A. Sign
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
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%
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
18. happens when one party end the contract because of breach by the other
A. Cancellation
B. Suspension
C. Impossibility
D. Termination
A. it is signed within power

20. In some legal system, the buyer has the right duty to inspect delivered goods
A. and
B. Or
C. and/or
D. but
A. Disruption
B. Authentication
C. Convenience
D. Adoption
22. Transfer of risk from the seller to the buyer (Incoterm 2000) FAS
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
C. Open cover
24. A contract requiring the exporter to send the contract goods by road from Kenia to
A. CFR Lusaka
B. CPT Lusaka
C. CFR Nairobi
25. Transfer of risk from the seller to the buyer (Incoterm 2000) DES
A. When the goodsare ex-ship
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
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:
D. An invitation to the other party to accept an offer
A. is essential
B. Is not useful
C. is not essential
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
D. Having no guarantee for payment
30. When there are words like about or approximately in the LCs amount, how
much can the actual payment be?
A. The actual payment therefore can be 10% more or 10% less than the stated
amount
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
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
C. Implied warranty of marchantability
34. Earthquake, volcanic eruption and lighting are not coverd under the cargo clause
A. A
B. B
C. C
D. B and C
of the International Air Transport Association-IATA?
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
A. The issuing bank
D. Any third party
37. Which type of bill of lading is negotiable?
A. surrender
B. straight
C. to order
38. The two terminologies which mean the same thing are
B. Bond and Surety
C. Warranty and defects liability
39. . Bill of lading-goods were taken on board in good condition
A. Clean
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
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
D. solved
42. In most guarantee, the bank agree to pay on first demand which means
43. The contract should regulate what happen if Incoterm 2000 and the terms of the
contract conflict normally the . Prevails
A. Incoterm
B. Contract
44. The entire agreement clause means that all documents that predate the contract..
A. are still valid
B. become important
C. become invalid
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
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
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
48. Inspection by the buyer is called
B. Inspection of good prior to shipment
do Other documents include?
A. A certificate of Origin
B. A certificate of Inspection
C. A health Inspection
D. Any of the above
50. The point at which money is deemed to be paid most preferred by the seller is
B. When the buyers bank transfer funds
C. When the buyer instruct the bank to pay
26
1. The official mailing addresses of the parties are given in...
A. The notices
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
3. Who signs shipped on board notation?
A. Captain
B. Exporter
C. Shipping company
D. Agent
impossible specification is......in business
A. Lucrative
B. Risky
C. Advantageous
D. Common
5. A contract comes into force when an offer is made by one side and.....by the other
A. Accepted
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
B. The exporter
C. A bank
D. A third party
7. A bill of lading with the note is
B. Claused bill of lading

8. Where is often the place of expiry of the credit?
9. For the exporter, the option to repair a defective item abroad......
A. Is negligent
B. Can be costly
C. Is always the best choice
D. Is always the worst choice
10. Anglo-American law is also called:
A. Common law
B. Civil law
C. Law code
D. Legal code
is.........
A. The bank will cite a discrepancy, some aspect of the documentation that
is not in line with with the terms of credit
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 buyers country
D. All of the above
14. Continental law is also called...
A. Civil law
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
credits 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
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
17. When a contract is canceled, a payment problem arises, the party in breach has
a.....case of payment
A. Strong
B. Weak
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
C. The agent
19. Which of the following is NOT a method of issuing the letter of credit
A. By email
B. By airmail
C. By mail
A. The buyer
B. The seller
C. The agent
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
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
C. The UCC
23. Another name for Tender Guarantee is.......
B. Bid guarantee
C. Bond guarantee
D. Bid bond
A. Captain
B. Exporter
C. Shipping company
D. Agent
bank to open a letter of credit. One of the required shipping documents was a
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?
E. Definitely it could
F. Probably it could
G. No it couldnt
H. 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.......
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
28. The risk of rough handling is not covered under the cargo clause.......
A. A
B. B
C. C
D. B and C
29. Who issues the bank guarantee?
A. The buyer
B. The exporter
C. The third party
D. A bank
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,
designated vessel has arrived late at the point of loading
31. Drunken people have no......to sign a contract
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
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
C. 3 originals and 9 copies
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. documents are not presented within the required time
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
37. A grace period is sometimes used to.......
A. Avoid penalty
B. Facilitate early delivery
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
C. A letter of reference
D. A personal letter
wrong?
A. Completely right
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
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
42. .....is open-ended
A. Tailor-made
B. Floating
C. Open cover
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
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
45. A radio lacks the wires connecting the loudspeaker to the amplifier is an
example of
A. Defective design
B. Defective materials
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......
B. Business-like and flexible
A. Software
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
49. Feeble-minded people lack.....to enter contracts
A. Money
B. Time
C. Contractual capacity
D. Intelligence
50. In contracts, .....is not normally allowed
27
1. The things that the exporter should keep in mind in negotiating payment are....
E. Payment method, timing, place, delay and results of delay
F. How payment will be made and the date of payment
G. Where the money must be before payments is considered complete and what delay
in payment is excusable
H. Results of non-excusable delay in payment and time of payment
2. Under Anglo-American law, exporters have rights to...
A. Withdraw an offer
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
C. A letter of reference
D. A personal letter
E. Defect in workmanship
F. Defect in material
G. Defect in design
H. Defect in quantity
5. In most guarantees, the bank agrees to pay "on first demand" which means....
6. A contract is ultra vires is....
A. well enforceable
B. unenforceable
C. valid
D. effective
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
8. The best solution for the exporter to make late payment impossible is....
E. 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
F. An agreement with the buyer to strenthen the payment probisions with a payment
guarantee
G. An agreement with an insurance company in case the buyer fails to pay on time
H. A confirmed, irrevocable, at sight letter or credit.
9. Which of these is the cheapest option for the exporter
A. Repair
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.
B.
C.
D.
By email
By airmail
By mail
By teletransmission
lading?
possession of the buyer
C. Such a letter of credit is certain to cause delay in payment
12. A ban is issued on the exporter of jute products by newly elected government
A. Yes
B. Questionable
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
14. The cheapest mode of transport is....
A. by sea
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
D. The opening bank
16. Payment guarantee means...
A. bond
B. surely
C. warranty
D. A triangle relationship amongst guarantor, principal and beneficiary
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
D. Only "A"
19. If the price is quoted CIF San Francisco, who pays for the insurance and freight
A. The exporter
B. The buyer
20. Within the four alternatives of the at-sight Letter of credit, which one is the least
contract and....
22. If the price is quoted CPT Vancouver, who pays for the freight
A. The exporter
B. The forwarding agent
C. The buyer
23. It is common to put the definition clause.... of the contract
A. at the beginning
C. at the end
D. near the end
A. CIF Windhoek
B. CIP Windhoek
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
26. In contracts,........ is not normally allowed
B. Assignement of rights
27. Elderly people are... to deal with a contract
E. Unable
F. Able
G. Impossible
H. Unaffordable
28. Export credit insurance which gives the exporter an acceptable level of payment shall
be paid by....
A. The buyer
B. The exporter
C. A bank
29. Transfer of risk from the seller to the buyer ( Incoterm 2000): FOB
A. When the goods are At the seller's premises
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
31. The risk of rough handling is not covered under the cargo clause....
A. A
B. B
C. C
D. B and C
32. ..... happens when one party ends the contract because of breach by the other
A. Cancellation
B. Suspension
C. Impossibility
D. Termination
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
34. Feeble-minded people lack.... to enter contracts
A. money
B. time
C. contractual capacity
D. intelligence
35. The decision of arbitrators is....
A. Law-oriented
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
C. Invoice
37. If the price is quoted CFR HaiPhong, who pays for the freight?
A. The buyer
B. The exporter
C. The carrier
38. The word "cash" in international trade means.....
A. Coins and notes
B. Gold
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

40. The defects liability period is also called
A. Warranty period
B. Guarantee period
41. The bill of lading issued by the carrier for road transport is called....
B. Road bill
C. Roadway bill
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
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
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
45. The two terminologies which mean the same thing are.....
B. Bond and Surety
46. If the price is quoted FCA, who pays for the freight
A. The exporter
B. The carrier
C. The buyer
A. Obtaining loans
C. Credit purchase
D. Profit making
buyer may....
A. reject the whole
B. accept the whole
D. All the above
49. A promise by the exporter to cure defects in his product is called
A. A product guarantee
B. A product warranty
C. A product insurance
D. A product certification
50. Feeble-minded people are legally unable to..... contracts
A. Sign
B. Decline
C. Refuse
D. Resign
28
1. As the consequences of a defect can be expensive, the question of who pays the
A. Agreeable
B. Controversial
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
3. Among a number of international bodies offering arbitration service, the in Paris is
the most prestigious.
A. UCP
B. ADR
C. ICC
D. FAO
4. In contracts, is not normally allowed.
C. Performance of obligation
5. If shipment is made on CIF or CIP terms, the letter of credit will call for
D. Either A or C
6. A warranty protects
A. The exporter
B. The importer
C. Neither the exporter nor the importer
D. Both the exporter and the importer
7. A well-designed set of specifications protects buyers against product
A. Advanced
B. Dented
C. Inferior
D. Superior
D. Any of the above
A. Captain
B. Exporter
C. Shipping company
D. Agent
10. Transfer of risk from the seller to the buyer (Incoterm 2000): DDU
C. When the goods are across the ships rail
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
C. Disruption and prevention
D. Suspension and acceptance
12. is open-ended
A. Tailor-made
B. Floating
C. Open cover
13. In contract negotiation, an invitation to provide terms and condition may mean
C. An invitation for the other party to make an offer
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%
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
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
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
C. Compliance
D. Verification
18. Transfer of risk from the seller to the buyer (incoterm 2000): CFR
19. Which of the following discrepancies is NOT the problem with the letter of credit?

20. door to door service is offered. Which term should be used?
A. DDP
B. CIP
C. CIF
A. A clause
B. B clause
C. A,B,C clause
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
23. can create no contract situation
A. Only duress
B. Only fraud
C. Only mistake
D. Duress, fraud and mistake all
24. The guarantor is usually a
A. Bank
B. Insurance company
C. Both a and b
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
B. The exporter wants to begin preparation for delivery
C. The buyers 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
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
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
D. Verification
29. A grace period is sometimes used to

A. Avoid penalty
B. Facilitate early delivery
C. Avoid liquidated damages
30. Inspection of the goods by the buyer in the manufacturers factory is referred to as
31. The point at which money is deemed to be paid most preferred by buyer is
B. When the buyers bank transfers fund
32. Most contracts contain an assurance that the exporter will any defects in his
product
A. Make good
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
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
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
D. The manufacturer
36. The entire agreement clause means that all documents that predicts the contract
E. Are still valid
F. Become important
G. Become invalid
H. Can be used as evidence
37. The name of parties to contract are often on of the contract
A. The 1st page
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

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
41. If a contract is the entire agreement, earlier letter and documents
B. Become invalid
C. Prevail
D. Remain important
42. If the price is quoted CIP Vancouver, who pays for the freight?
A. The exporter
B. The forwarding agent
C. The buyer
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
C. The seller can realize some parts of the LCs 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
B. The carrier
C. The issuing bank
A. It is the kind of credit which allows the exporter to transfer his right as the credit s
B. It is the kind of credit which allows the 1st beneficiary to request the confirming
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
B. Quasi indemnity
C. Penalty
47. refer(s) to the questions of implied warranties.
A. Most contracts
B. Most laws
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
49. Transfer of risk from the seller to the buyer (Incoterm 2000): FAS
B. When the goods are handed to the 1st carrier
50. In CIP and CIF contracts, ... must pay for insurance from the point of delivery to the
A. The exporter
B. The importer
C. The carrier
29
1. Agreement, under Anglo-American law, are of_________
A. 2 types
B. 3
C. 4
D. 5
2. Another name for warranty is ________
A. Guarantee
B. Defect liability
C. Legal responsibility
D. Warrantee
A. DDP
B. CIP
C. CIF
A. Payment mode, timing, place, delay and results of delay
C. Where the money must be before payment is considered complete and what delay in
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___
B. Biz-like and flexible
A. A
B. B
C. A, B, C
7. Transfer of risk from the seller to the buyer (Incoterm 2000): FAS
8. Most contracts contain an assurance that the exporter will___ any defects in his products
A. Make good
B. Take away
C. Alter
D. Modify
9. Which of these does not count as a defect?
A. Defective design
B. Misuse
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
payment shall be paid by
A. The buyer
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 exporters cost

B. Reduce the price
13. The buyer shall notify the Seller of defects without undue delay. This is the example of
A. Defects liability 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
15. A marine bill of lading can be negotiable document with which___
A. The buyer can use it to resell the goods during shipment
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
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
B. Production
C. Resolution
D. Profitability
18. Unless otherwise agreed, the insurance is minimum cover- cargo clause_____
A. A
B. B
C. C
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
D. Because the documents in a LC are proofs of trust
20. The answer to background question are written ______
A. Through the whereas-recital (gingcu 10)
A. A software
B. Hardware
C. Footwear
D. Chinaware
22. Continental Law copes with_____
A. Personal problems
B. International trade
C. National issues
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
C. Buyers are willing to spend money on a payment guarantee
D. In a sellers 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
25. The seller shall make good the defect or damage as soon as practicable and at his own
cost
A. Legal action period
D. Defect liability period
26. Whereas-clauses____
A. Are provisions
B. Are promises
C. Are conditions
D. Are not provisions, promises or conditions
27. The bank notifying the exporter that the LC has been opened is called____
A. The issuing 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
A. CFA Lusaka
B. CPT Lusaka
C. CFR Nairobi
30. The exporter should have no liability for the goods when they are_____
A. Beyond his control
B. In his control
C. Under his control
A. Crushed or stained garments
32. Bill of lading is the most important document because it is a _____
A. Document of title
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?
B. Upgraded packing materials
34. 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
C. He can get some export incentives from the Gov
D. All of the above
36. A machine that consumes more fuel than specification is an example of
A. Latent defect
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
D. Legal system
38. Transfer of risk from the seller to the buyer: CIF
B. When the goods are handed to the 1st carrier
39. Which of the following discrepancies is not the prob with the LC?
40. In a contract under a continental law, a recital _____
A. Is essential
B. Is not useful
C. Is not essential
D. Is important
41. Assuming shipment is by rail, what if a LC demands the original bill of lading?
B. The original of the BL for shipment by rail doesnt come into possessions of the
buyer
C. Such a LC is certain to cause delay in payment
42. _____________ is 2-sided procedures
A. Termination
B. Cancellation
C. Rescission
D. Suspension
43. A volcanic eruption buries the factory in ash (force majeure)
A. Yes
B. Questionable
C. No
a. Continue the contract
b. Terminate the contract
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
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
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
price
D. Refusal from the insurance company to quote premiums due to risky biz of the
buyers non-creditworthiness
47. Anglo-American law brings the ____ in the individual case
A. Justice
B. Uniformity
C. Consistency
D. Legacy
48. Another name for tender guarantee is _____
B. Bid guarantee
C. Bond guarantee
D. Bid bond
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
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
30
A.
B.
C.
D.
A.
B.
C.
D.
D.
E.
F.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
1. Defects that come to light after buyers acceptance are called:

Patent defects
Latent defects
Coherent defects
Apparent defects
2. A commercial invoice must be made out to:
The exporter
The shipper
Any party endorsing the bill of lading
The applicant of the letter of credit, normally to the buyer, unless otherwise stated in
the credit
3. Delivery of the goods under the most export contracts take place in a country of :
The importer
The exporter
The agent
4. If the price is quoted EXW, who pays for freight?
The exporter
The buyer
The forwarding agent
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
Sight draft
Short-term draft
Time draft
Long-term draft
6. A inspection by the buyer is called:
Independent inspection
Inspection of goods prior to shipment
Open package inspection
Customs inspection
he do?
There is no way he can get money immediately
He can exchange the letter of credit for cash with any agreeable bank
The seller can realize some part of the letter of credits value, not full value
Payment is still safe but is delayed
been preparing legislation on this subject of five years
A.
B.
C.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
E.
(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)
Yes
Questionable
No
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..
Excused/ force majeure
Not excused/ force majeure
Excused/ Acts of God
Excused/ contingencies
10. If the shipment is under Incoterm other than CIF or CIP,
The buyer has to arrange the Insurance cover by himself.
The buyer may still ask the exporter to arrange some aspects of insurance for him.
The exporter has to arrange the Insurance cover for the goods
The exporter pays for insurance till the port of discharge.
11. The bill of lading is issued by the carrier for combined transport is called
Combined bill of lading
Combined bill
Combined transportation bill of lading
Combined transport bill of lading
12. Which the following is NOT the reason why the exporter prefers a longer expiry
period of credit?
He wants to save bank charges
He wants enough time after delivery to present the document
He wants to have enough time to correct any discrepancies that might be discovered by
the bank
He wants to spare some times for any unexpected things preventing his presentation of
documents on time.
How many arbitrators sit in the court?
What is the language of court?
Where is the place of court?
All of above
14. Which type bill of lading is negotiable?
Surrender
Straight
To order
15. Export credit insurance is very attractive; however, it has certain limitations like
High premium paid by the exporter
F. Long time waiting for compensation from the insurance company

G. 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.
H. Refusal from the insurance company to quote premiums due to risky business or the
buyers 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
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
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
B. The term
C. The incoterm
D. The appendix
19. Transfer of risk from the seller to the buyer (Incoterm 2000) : CIP
20. Is there any reconfirming bank ?
A. No, there isnt
B. Yes. There is one in case banks are reluctant to confirm letter of credit, especially
those from obscure banks
C. Never is there
D. It depends
A. The seller is liable for goods
B. The buyer is denied of some of his normal rights
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
23. Where is the often place of expiry of the credit?
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
I.
J.
K.
L.
A.
B.
C.
A.
B.
At the courters of the issuing bank

At the courters of the advising bank
At the courters of the confirming bank
At the courters of negotiating bank
The exporter can provide the missing paperwork or correct errors
The exporter can ask the buyer to instruct the bank to change the terms of the letter of
credit
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
Any of the above
25. Beside the commercial invoice, he transport document and insurance document ,
what do Other documents include?
A certificate of origin
A certificate of inspection
A health inspection
Any of the above
26. The answer for background questions are written:
Through the whereas-recital
Through the annex
Through provisions
Through conditions
Quality
Customer satisfaction
Correct making and packaging
On-time delivery
The buyer
The seller
The agent
It depends on the agreement
29. The exporters wording and the Buyers wording in the defect liability provision
represent:
A major contract issue
A minor contract issue
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.
Insurance
Payment
C. Invoice
31. Within the four alternatives of the at-sight letter of credit, which of one is the least
32. Title of the goods passes
A. With risks
B. Without risks
C. With documents
33. Elderly people are .. to deal with a contract.
A. Unable
B. Able
C. Impossible
D. Unaffordable
34. The word cash in international trade means.
A. Coins and notes
B. Gold
C. Checks and bank transfers
D. Prepayment
35. Continental law is based on a .
A. Case law
B. Common law
C. Legal code
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
37. The hereinafter called wording can prevent legal problem cause by :
A. Misspelling names
B. Mistyping names
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
B. The exporter
C. A bank
D. A third party
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
A.
B.
C.
D.
E.
F.
G.
H.
E.
F.
G.
H.
A.
B.
C.
D.
A.
B.
39. The Buyer shall notify the Seller of defects without undue delay. This is example
of:
Defect liability period
Notification period
Rectification period
Legal action period
40. ...happens when one party ends the contract because of breach by the other.
Cancellation
Suspension
Impossibility
Termination
41. In principle, the buyer and reject delivered goods if they do not conform to the
contract. This is called.
Implied warranty of suitability
Implied warranty of conformity
Implied warranty of merchantability
Implied warranty of fitness for intended purpose
42. The goods become deteriorated as a result of normal use. This process is called:
Fair play
Fair wear and tear
Faults not present on delivery
Farewell
43. The greatest fear for the exporter is :
Being unable to meet the delivery deadline
Being unable to meet the specification of the goods
Being unable to get paid for the goods sold
Having no guarantee for payment
44. Transfer of risks from the seller to the buyer ( Incoterm 2000) : CPT
When the goods are at sellers premises
When the goods are handed to the first carrier
When the goods across the ships rail
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?
Warranty
Guarantee
Defects liability
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?
Because the discount is so attractive to the buyer
Because the buyer can save on the invoice price
C. Because the exporter can substantially improve his cash flow

D. Because the exporter just wants to get payment on delivery
47. The court of arbitration applies whatever .. the parties stipulate in the
contract
B. Corporate law
C. National law
D. Business law
48. .. is two-sided procedures
A. Termination
B. Cancellation
C. Rescission
D. Suspension
49. A contract that is ultra vires is
A. Well enforceable
B. Unenforceable
C. Valid
D. Effective
50. The name of parties to the contract are often on ..of the contract
A. The first page
B. The second page
C. The last page
D. All pages

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S 1

B. Assurance of product performance

C. Because the exporter can substantially improve his cash flow

D. the UN Convention on Contract for acceptance

B. Terminate the contract

D. It depends on the agreement

C. Where is the place of the court?

B. When the goods are handled to the first carrier

A. reject the whole

C. FOB Dar es Salaam

15. Small purchase in private life are often in the form of

A. May invalidate the rest

G. Sometimes the entire agreement

14.Which of the following is the objective aimed at by the exporter to minimize

F. Keeping his promise

G. It has an illegal purpose

H. Guarantee and Insurance

A. Definitely ,it could

D. because or consider that

C.The exporter has to arrange the insurance cover to the goods

A. Three originals and 3 copies

13. In settlement by sight payment..

40. Which of the following examples is a patent defect?

1. A Contract is not enforceable if.

D. Dependent on type of goods

B. Credit by deferred payment

28. Is there any reconfirming bank?

35. To avoid confusion, many contract drafters use .. instead of warranty

C. The bank of the exporter

44. Minimum Coverage is so-called Cargo Clause

C. Open package inspection

D. Duress,fraud, and mistake all

C. Choices of method of payment

A. The exporter has a problem

16. In a contract under a Continental Law, a recital

c. When the goods across the ships rail

36. An offer dies if it has a/an

D. The forwarding agent

B. When the goods are handed to the first carrier

28. Under Anglo-American law, a contract must give

Oceanea a prosperous country. Duration of the contract is 2 years, but renewable.

46. The arbitrators awards are

15. Defects include:

A. The contract is binding

10. In the contract, consideration may consist of..

C. Can be either one-sided and two-sided

A. A well- designed set of specifications

C. It depends on type of credit

C. He wants to have enough time to collect and discrepancies that be discovered

7. The elmise covers General Average.

A. A shorter warranty period.

28. Feeble- minded people are legally unable to contracts

7. Which of the following of the method of payment is NOT possible?

b. Does not invalidate the rest

A. the exporter wants to be informed of the issuance of the letter of credit by

24. IN a contract, the word "whereas" means....

A. The seller presents the necessary documents to the issuing bank.

A. The exporter can provide the missing paperwork or correct errors

B. Implied warranty of conformity