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Môn dịch hợp đồng > QUESTION IN BOOK > Flashcards

QUESTION IN BOOK Flashcards

1

1
Q

where is risk often passed from the exporter to the importer

A

at the point of delivery

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2
Q

what are Modes of transportation

A

Sea, Air, Inland (road, rail, Barge, Mail, Mixture)

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3
Q

where does transfer of ownership take place

A

Any point between signature of contract and final payment for goods.

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4
Q

what are kinds of delay in delivery

A

excusable delay, non-excusable delay

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5
Q

what events does delivery dates trigger = start

A

Exporter fulfills duties under the contract

Payment made become due risk and title pass to the Buyer

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6
Q

name typed of insurance policy

A

floating, valued, unvalued, tailor-made, open cover, time, voyage.

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7
Q

name some features of liquidated damages

A

The sum is fixed in advance with the agreement of the parties related the sum is fair the objective is to compensate there is always a maximum for the sum.

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8
Q

name some features of penalties

A

The sum is fixed in advance with the agreement of the parties related the sum is big
the objective is to punish
the sum is subject to actual loss.

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9
Q

how to fix the delivery date In a contract

A

to use a straight forward calendar date or a period of time

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10
Q

when Is a contract binding and effective

A

After the date of coming into force.

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11
Q

what is the importance of a well-designed set of specifications

A

Protect the seller and buyer

the exporter.

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12
Q

list all changes must affect price:

A
  • size of order - specification -packaging and safety warnings - payment term -delivery -warranty period-incoterms
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13
Q

what are five steps in negotiating payment?

A
  • mode of payment -timing -place of payment -delay -result of delay
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14
Q

_step 1: method of payment: state some common methods of payment in international trade?

A

+ payment on open account with no security + payment on open account secured by export credit insurance + payment on open account secured by a payment guarantee + payment by L/C

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15
Q

_step 2: time of payment: how to mention the time of payment in a contract?

A

the time for payment can be regulated in 2 ways: + they are enter calendar date (ex: 30th june) + interval time (ex: within 30 days of date on invoice)

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16
Q

_step 3: place of payment: where can payment take place?

A

+ payment can be said to occur when the importer pays money to his bank for transferring to the seller (for the buyer)
+ payment shall be deemed to have been made only when the contract sum in paid into the seller’s bank account and is at the seller’s full disposal (for the seller)

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17
Q

_step 4: delay in payment: define delay in payment?

A

+ force Majeure can cause payment to be delayed

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18
Q

_step 5: results of delay in payment: if payment is late, what must a buyer normally do?

A

+ the buyer must normally pay an interest on all sum owned to the exporter.

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19
Q

What is Export credit insurance?

What is Export credit insurance used for?

A

Document ensure exporter against the risk of non-payment.

To recover the cost of goods exported but not paid for, allow the exporter to trade on open account.

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20
Q

What is bank guarantee? What are common guarantee? What is each for?

A

It promises from the guarantor to pay money to the beneficiary if the principle break its promises.
Tender guarantee: đảm bảo thực hiện thầu.
Advance payment: đảm bảo trả tiền.

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21
Q

4 Common guarantee:

A
  • payment guarantee ( risk of non-payment) · - - Tender guarantee (risk of cancellation an offer) - Performance guarantee (risk of non-performance or inadequate performance) ·
  • Advance payment guarantee (risk of loosing pre payment)
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22
Q

What is Letter of credit?

A

A L/C adds a bank promises to pay the exporter to a sum of money of the foreign buyer provided that the exporter has complied with all the terms and condition of the L/C. Separate with the sales contract.

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23
Q

State the principles of the letter of credit?

A

Autonomy: is a contract in its own right, entirely separate from Sales contract. Strict compliance: exporter must present to the bank shipping document that comply in all respects with the terms and condition of L/C, small deviations will result in refusal by the bank to pay.

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24
Q

ex of The principle of autonomy

A

A letter of credit is an “autonomous” contract: it has no legal connection with the export contract which it supports, the bank must pay the seller if the document presented are correct. This principle defends the interest of the seller.

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25
Q

The principle of strict compliance

A

The bank promises to pay if the documents presented are correct if the documents in any way fail to comply strictly with the terms of the letter of credit, the bank must refuse to pay. This principle defends the interest of the importer.

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26
Q

Notification from the Advising Bank

A

In practice, all letters of credit are irrevocable
- The advising bank always notifies the seller that the letter of credit has been opened

  • the letter of credit always contains an indication of whether or not the advising bank confirms the credit.
  • If the letter of credit is confirmed, then the advising bank must pay the exporter on exactly the same amount as the issuing bank. That means the exporter can, if the credit is suitably worded, collect payment immediately after delivery.
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27
Q

Letter of credit: associated documentation

A 
#Documents required 
- a Letter of Credit is a “documentary credit” - it can be paid only against document.
- The parties should agree which documents are important to them - not leave the decision to the bank.
#key documents 
- commercial invoice 
- transport docs 
- insurance docs
#other common documents 
- certificate of origin 
- certificate of inspection 
- special requirements
#Specification 
the Letter of Credit should state exactly what documents are required
including any special requirements as to: 
- signature
- sources 
- notarization
- exact contents
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28
Q

common Discrepancies reported by Banks #problems with the Letter of Credit

A
  • Documents required by the credit are missing - documents required to be signed are not signed - the credit amount is exceeded - the credit has expired or documents are presented within the required time - shipment was short or late
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29
Q

common Discrepancies reported by Banks #problems with the Bill of lading

A
  • the bill of lading is “uncleaned” - a marine bill of lading is required, but the bill does not state that the goods were “shipped on board” a named vessel
  • the bill of lading shows shipment between ports other than those specified in the credit
  • the bill of lading shows that the goods were shipped on deck. (forbidden) - the bill of lading offers no evidence that freight was paid by the exporter (if this was required)
  • There is no endorsement (if endorsement is necessary).
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30
Q

common Discrepancies reported by Banks #Problems with Insurance

A

• The insurance document is not of the type specified in the credit • The insurance risks are not those specified in the credit. • Insurance cover is expressed in a currency other than that of the credit • Insurance cover begins after or ends before the date of the transport document.

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31
Q

common Discrepancies reported by Banks #Inconsistencies among the Documents

A

• Description of the goods on the invoice and in the credit are different. • Weights differ between two documents. • Marks and numbers differ between two documents.

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32
Q

common Discrepancies reported by Banks #Issuing a letter of credit

A
  • exporter and buyer sign a contract - The buyer asks a local bank to open a letter of credit - The issuing bank askes a band in the exporter’s country to advise the exporter that the letter of credit has been opened
  • The advising bank advises the exporter that the letter of credit has been opened.
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33
Q 
common Discrepancies reported by Banks
#Presenting letter of credit
A
  • Seller ships the goods and gets shipping documents - The exporter presents the shipping documents to the advising bank - The advising bank checks the documents and (if appropriate) pays the exporter- The advising bank notifies the issuing bank that the credit has been presented and forwards the shipping documents
  • The issuing bank transfers necessary funds to the advising bank
34
Q

settlement by sight payment

A
  • The Seller presents the documents to the paying bank. - The paying bank immediately pays the seller.
35
Q

settlement by deferred payment

A
  • The seller presents the documents to the paying bank. - The paying bank agrees to pay the seller the face value of the credit when it matures.
  • If the seller needs money immediately, he can exchange the letter of credit for cash (at a discount) with any agreeable bank.
36
Q

settlement by acceptance

A
  • The seller presents to the accepting bank the documents and a bill of exchange (time draft) drawn usually on the buyer.
  • The accepting bank agrees to pay the bill when it matures. - If the seller needs money immediately, he can exchange the letter of credit for cash (as a discount) with any agreeable bank
37
Q

settlement by negotiation

A
  • The seller presents to the negotiating bank the documents and a bill of exchange drawn usually on the buyer.
  • The negotiating bank negotiates the bill (at a discount).
38
Q

What are the common methods of payment in international trade?

A

Payment on open account with no security / secured by export credit insurance.
Payment on open account secured by a payment guarantee
Payment open letter of credit

39
Q

What are methods of payment in small purchase

A

cash on delivery
cash against invoice
cash with order

40
Q

what kind of method of payment makes late payment impossible

A

The confirmed irrevocable at sight L/C

41
Q

when delay in payment is excused?

A

Delay happens in the grace period

Delay is caused by Force Majeure

42
Q

What does the insurance premium depend on

A

The type of goods
The creditworthiness of the buyer
the stability of the Buyer’s Country and so on

43
Q

what is the guarantee triangle

A

That is the relationship of the principal, guarantor, and beneficiary in terms of guarantee.

44
Q

what are the business situations that commonly use guarantee

A

Non payment, reservation, non-performance, losing prepayment.

45
Q

what are the guarantees used in the following business situations

A

Payment Guarantee
tender Guarantee (thực hiện thầu)
performance Guarantee (thực hiện hoạt động)
prepayment Guarantee

46
Q

Name types of L/C you know

A

revocable - irrevocable, confirmed - unconfirmed, At sight, back to back, resolving, stand by L/C (dự phòng)

47
Q

What is export credit insurance

A

Export credit insurance is a guarantee of payment for the exporter from a third party, an insurance company, which issues an export credit insurance policy covering the risk of non-payment. The exporter has to pay the costs for that guarantee. The insurance company will pay the exporter in case the buyer fails to do so.

48
Q

what is bank guarantee

A

A bank guarantee is a guarantee of payment for the exporter from a third
party, a bank. The bank may issue a bank guarantee assuring in case the bank will pay for the exporter in case the buyer fails to do so. The buyer has to pay the costs of that guarantee

49
Q

Distinguish Export credit insurance and Bank guarantee

A
  • Both of them are guarantee of payment from a third party, providing the exporter with some level of security in terms of payment
  • For ECI, the exporter has to pay for that guarantee while it is the buyer who pays for a Bank Guarantee. The third party offering export credit insurance is the insurance company while the bank offers a Bank Guarantee
50
Q

What are some limitations of export credit insurance

A

Though ECI seems to be so attractive, it has certain limitations. Firstly, there is always a long wait between the time when the buyer fails to pay and the time when the insurance company compensates the exporter, says 6 months. Secondly, when the compensation is paid, it is unlikely to cover 100% of the original invoice price. So, with ECI, the exporter is covered against the worst.

51
Q

what kind of method of payment makes late payment impossible

A

The confirmed irrevocable at sight L/C

52
Q

distinguish Irrevocable and Revocable Letter of Credit

A

A revocable L/C is the L/C that can be canceled at any time by the Buyer or by the issuing bank while an Irrevocable L/C is the L/C that can only be canceled with the written consent of

53
Q

Why do companies have quality assurance programs?

A

Because no manufacturer can product perfect products all the time. Moreover, quality is a key issue and customer satisfaction is essential to successful business. So companies have quality assurance program to ensure that customers get what they paid for to ensure customer satisfaction.

54
Q

Why may conflicts arise in negotiating specifications?

A

Because it is a difficult process. The manufacturer often tempted to be overoptimistic and to agree to impossible specifications, which is very risky in business. Conflicts can arise even with in the exporter’s own team: the marketing manager is eager to sell brilliant products, but the production department knows that it cannot make them.

55
Q

What is the benefit of a well-designed set of specifications?

A

It protects both the buyer and the seller: the buyer is protected against inferior products as he can reject any products that fail to meet specification, the seller can protect its reputation and avoid cost.

56
Q

What kind of goods needs pre-delivery inspection? Give example.

A

All kinds if goods, especially sophisticated items or capital equipment.

57
Q

What are the functions of independent inspection?

A

It reports on the weight, size, and most importantly, the value of the goods. It prevents exporter and importer agreeing on unrealistically low invoice price in other to avoid customs duties in the buyer’s country. Such inspection also prevents shipment of patently defective goods.

58
Q

What does customs inspection reveal?

A

What does customs inspection reveal?

59
Q

What is the real inspection for goods?

A

That is inspection by the buyer, or “open package inspection”

60
Q

What counts as a patent defect? Give examples.

A

Defects that are apparent, e.g. wrong items, broken or missing parts, scratches, etc.

61
Q

What are Implied Warranties?

A

Assumptions that buyers can make about goods, even if the exporter gives no express warranty.

62
Q

What are 3 types of Implied Warranties? Give examples

A
  • Implied warranty of conformity with contract. - Implied warranty of merchantable quality. - Implied warranty of fitness for intended purposes: merely requires that the Seller possess knowledge and expertise on which the buyer may rely.
63
Q

What is a Product Warranty?

A

A promise by the exporter to cure defects in his product. There are 2 parties: the Buyer and the Seller.

64
Q

What is a Product Guarantee?

A

A promise of the guarantor to pay the beneficiary, made out at the request of the principal. There are 3 parties: guarantor, principal and beneficiary.

65
Q

What are the 3 types of defects? Give examples.

A

Defective workmanship, defective materials, defective design.

66
Q

What are the 5 options for curing defects?

A

Repair, allow the buyer to repair at the exporter’s cost, replace, reduce the price, return the goods and refund the price.

67
Q

Give the main characteristics of Continental Law?

A

Consistency and uniformity of enforcement, predictable, brief, nationally accepted.

68
Q

Give the main characteristics of Anglo-American Law?

A

Unpredictable, long, detailed, international accepted.

69
Q

What does the clause of applicable law govern?

A

Questions concerning validity, interpretation for performance of the contract.

70
Q

What are the principles of an enforceable contract?

A

The parties achieve a “meeting of mind” referring to mutual agreement, purpose is legal, the parties are capable of meeting a contract.

71
Q

What is the Entire Agreement clause?

A

The final written version of the contract replaces all previous agreement between the parties.

72
Q

What is The Whereas Recital? Why is it purpose?

A

It is the Background/Preamble of the contract. When the dispute arises, the judge must ask some background questions.

73
Q

What is discharge by performance?

A

Both parties perform their duties exactly according to the contract and the last duty is fully performed.

74
Q

What is termination? Name the two types of termination.

A

One side may have the right under a contract to end this contract.

  • Termination for convenience
  • Termination for default
75
Q

What is cancellation?

A

When one party breaches a contract, the other has the right to demand cancellation of the contract.

76
Q

What is recession?

A

The parties may simply agree to end their contractual relationship.

77
Q

What are the ways to solve disputes?

A
  • Conciliation: an amicable settlement
  • Arbitration: a panel of arbitrator solves the disputes.
  • Litigation: settlement by the court.
78
Q

What are the advantages of arbitrators?

A
  • Quick
  • Costs are predictable
  • Decision is business-oriented.
79
Q

When is a contract unenforceable?

A

It has illegal purpose

80
Q

What does the arbitration clause specify?

A

Who, number of arbitrators?
Regulations
Place (where it takes place), language
Fee

81
Q

Why do parties agree on a definite language contract?

A

Avoid confusion

Have clarity when your contract is translated and which prevails in case there is a conflict between 2 versions.

Môn dịch hợp đồng (5 decks)

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