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CHAPTER 1
1,What are 5 steps in negotiating delivery?
Timing, Location, Transport, Risk title and insurance, terms of trade
1.2, Why is delivery date important?
Because it lies at the heart of a sales contract, its key to many contract
event
2,Why is location important?
Transfer risk and Responsibilities, Date of payment depends on palce of
delivery.
3. Why is transportation important?
Costs, Appropriate type
4. What are modes of transportation?
Sea transport, Air transport, Inland transport (by road, by rail, by barge,
by mail, or by mixture)
5,Where is risk often passed from the exporter to the importer?
At the point of delivery.
6. Where does transfer of ownership take place?
At any point between the signature of the contract and the final
payment for the goods.
7. How many kinds of delay in delivery?
Excusable delay, Non- excusable delay
8. What events does delivery date trigger?
Exporter fulfills duties under the contract, Payment may become due,
Risk and title pass to the buyer.
9. How to fix delivery date?
To use a straightforward calendar date or interval times.
9.1 The way to write down the delivery date?
Use a straightforward calendar date
10. When is a contract binding?
After the signature date.
11. When is a contract binding and effective?
After the date of coming into force .
12. How does the date of coming into affect the delivery date?
The delivery date is normally fixed for a certain days after the date of
coming into force.
13. What is excused delay?
In the grace period, Due to FM
14. What are the 3 outcomes of FM?
Resumption of delivery, Termination of contract, Unclear and
dangerous situation.
15. What are liquidated damages?
A fair figure, a lump sum to be paid per day ( week or month) of late
delivery, agree by both parties.
16. What are penalties?
A fucking high figure used to threaten the exporter to achieve
acceptable quality
17. When do people pass risk and title of the goods ?
On delivery
18. Name types of risks?
risk of loss and damage, Risk of goods injuring the third party.
19. Name types of Insurance policy?
-Floating policy, Open cover: Both offer the exporter insurance cover
on all shipment over a period of time. Floating policy has policy on
each shipment. Open cover is not a policy, the insurer will write a
policy if required.
- Valued policy, when the exporter insures the goods, the value of the
goods is stated. This way he can include both the cost of the good and
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the expected profit he could make. Unvalued policy: the exporter
insures the Goods and the value is not stated (unvalued policy), then the
value can be established after a loss, the exporter must prove his figures
precisely.
-Time policy: goods are insured between two dates
Voyage policy: insured between two places
Liquidates damages Penalties Quasi-
indemnity
Predict (know in advance)
Sum is normally and fair
Agreed by 2 parties before putting
clause in contract
Sum of money doesnt depend on
factural loss
Doesnt know
in advance
Not very fair
Not agree in
advance
In theory
NOTE:
1. Shipping documents: the marine bill of lading, the airway bill,
the rail consignment note, the road consignment note. Combined
transport uses a combined transport bill of lading
CHAPTER 2
1,Why payment in international trade tightly controlled?
Trust is rare, Court is far away and unpredictable
2.What are the common methods of payment in international
trade?
Open account with no security, Open account with secured by export
credit insurance, Open account with secured by payment guarantee,
Payment by letter of credit
3. What are methods of payment in small purchases?
Cash on delivery, Cash against invoice, Cash with order
4. What are payment insurances?
Bank guarantee, Export credit insurance
5. Who can offer bank guarantee?
A bank
7. Who can offer export credit insurance?
An insurance company.
8. What are the two main elements in payment?
Time, Structure
9. What does the exporter have to suffer from late payment?
Bank interest
10. What is an incentive for early payment?
A discount
11. How to fix payment date?
A calendar date, Interval times.
12. When delay in payment is excused?
Delay happens in the grace period, Delay is caused by Force Majeure
13. What payment does the importer have to pay the exporter in
case of late payment?
Compensation for losses due to late payment.
14. What kind of method of payment makes late payment
impossible?
The confirmed, irrevocable, at- sight L/C
15. What may reduce risk for exporters?
Exporter may reduce risk by spreading risk with the third party.
16. In order to take out non- payment risk insurance, what does the
exporter have to do?
Contact an insurance company and explain the details of the business,
applies for a quotation from the insurance.
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17. What can we imply when the insurance company refuses to
offer an insurance quotation?
The insurance company knows the buyer uncreditworthiness, The
business is risky.
18. What does the insurance premium depend on?
The type of the goods, The creditworthiness of the buyer, The stability
of the buyer country and so on.
19. What is the guarantee triangle?
That is the relationship of the principal, guarantor and beneficiary in
terms guarantee.
20. What are the business situations which commonly use
guarantee?
- Non- payment: Payment guarantee
- Revocation: Tender guarantee
- Non- performance: Performance guarantee
- Losing prepayment: Prepayment guarantee
21. Name types of L/C you know?
- Revocable Irrevocable: revocable L/C can be cancelled at any time
by the buyer or by the issuing bank
- Confirmed- Unconfirmed: A confirmed Letter of Credit is understood
as the letter of credit to which a confirmation is added by a nominated
confirming bank. Confirming bank means the bank that is asked to
confirm the credit by an issuing bank
- At- sight L/C,
- Back to back L/C,
- Revolving L/C
22. when can use payment account method?
Long term biz relation, depends on situation (keep large inventory), not
very large contract value
23. ads of open acc: encourage high revenur, offer preferensor
condition
24. The insurance fee have to pay depend on:
types of goods, the credit worthiness of the buyer, the political stability
of the importer country
NOTE:
1.The At-sight Letter of Credit and the Alternatives
Settlement by sight Payment
Settlement by Deferred Payment
Settlement by Acceptance
Settlement by Negotiation
2.The Letter of Credit and its Associated Documentation
- Commercial invoice
- Transport documentation: sea transport, air transport, rail transport,
road transport and combined transport. The type required is stated in
the L/C.
3.Special problems related to transport document.
There are some problems arising in specific circumstances when
transport document is used as follows:
Shipment by sea: The carrier could issued a marine bill of lading, or a
sea waybill to the exporter.
Shipment by air: The carrier could issued an Air waybill,
Certificate of Origin(C/O) is required for import to the buyers country
under a preferential tariff or other agreement.

Certificate of Inspection can make importing easier. The parties should
make a note in their contract if this document is required.
3.Negotiating the Terms of a Letter of Credit
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- Agreement, Incorporation, Specification, Verification, Compliance
CHAPTER 3
1,What are 5 steps in negotiating Defect Liability Period?
Inspection, terms, definition, timing, corrective action
2. Why do companies have quality assurance programs?
The quality of the product is a key issue, and customer satisfaction is
essential to successful business so many companies have qualities
assurance programs to ensure that customers get what they pay for.
3. Why do conflicts may arise in negotiating specifications?
The marketing department wants to sell brilliant products, but the
production department cant make them.
4. What is the benefit of a well- designed set of specifications?
It offers vital protection the both sides. The importer is protected
against inferior products. And the buyer will be unable to find any
excuse for rejection or for exaggerated warranty claims.
5. Which kind of goods need pre- delivery inspection?
Sophisticated items or capital equipment
6. What are the functions of independent inspection?
Prevent exporter and buyer agreeing an unrealistically low invoice price
to avoid custom duties in the buyers country. Prevent shipment of
patently defective goods.
7. What does customs inspection reveal?
Customs inspection will reveal discrepancies in weight, size and
description.
8. What is the real inspection for goods?
Buyers inspection open package inspection
9. How to set the Defect Liability Period?
The defects liability period is negotiable, this is likely to be
several months from the date of delivery or the date of arrival.
10.What is patent ( open) defect?
Apparent defects that can be discovered on inspection (wrong items,
broken or missing parts)
11. What is latent ( hidden ) defect?
Hidden defects that need a period of time to come to light (structural
weaknesses, failure to operate at high or low temperatures)
13. What are Implied Warranties?
Warranty claims buyer can make even if exporter doesnt express it in
the contract.
14. What are 3 types of Implied Warranties?
Implied warranty of conformity with contract, Implied warranty of
merchantable quality, Implied warranty of fitness for intended purpose
15. What is the main different between Warranty and Guarantee?
Warranty Guarantee
- a promise about your own
performance

- a promise by the exporter to cure
defects in his products
- an absolute undertaking on the
part of the warrantor
- a promise about somebody elses
performance


- a promise of the guarantor
16. What is a Product Warranty?
A product warranty is a promise by the exporter to cure defects in his
products
17. What is a Product Guarantee?
A guarantee is a promise of the guarantor about somebody elses
performance
18. What are the 3 types of defects? Give examples.
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- defective workmanship: a product with defective workmanship is
incorrectly built
- defective materials: inferior or somehow incorrect
- Defective design: does not make specifications
19. What is not a defect?
Not a defect cover: two common exclusions are fair wear and tear and
misuse by the buyer. Fair wear and tear is the result of normal use.
Misuse is seriously incorrect handling by the buyer.
20. What does the Defect Liability Provision often mention?
A standard provision mentions the three types of defect, it states a date
on which the products were free of defects, it excludes problems caused
by misuse or wear and tear, and it establishes the exporters duty to
cure the fault.
21. What are the 4 Timing problems in Defect Liability Period?
The Defect Liability Period , the Notification Period, The Rectification
Period, The Legal Action Period
22. What are the 5 options for curing Defects?
Repair, allow the buyer to repair at exporters cost, replace(part or
whole item), reduce the price, return the goods and refund the price

CHAPTER 4
1.What are differences between Anglo-American Law and
Continental Law?
As below
2. Give the main characteristics of Continental Law
Goals: Consistency and uniformity of enforcement
Predictability and consistency of court decisions: Decisions in all but
the most difficult cases are predictable with some accuracy. Decisions
are generally consistent from court to court.
Length and detail of contract: Because the law regulates most problems,
contracts can be short and lacking in detail.
International acceptance: Continental laws do not have the prestige of
Anglo American laws in international practice. They tend to focus on
national rather than international issues
3.Give the main characteristics of Anglo-American Law?
Goals: Justice in the individual case
Predictability and consistency of court decisions: Unless matters are
carefully regulated in the contract, the decision of the judge is not fully
predictable. Different judges may give widely different judgment.
Length and detail of contract: To be clear, contracts must regulate many
issues, so they tend to be long and detail
International acceptance: English and American law have been relined
over the centuries to cope with issues of international trade. The
principles are widely understood and respected.
4. What does the applicable law govern?
if a problem is not mentioned in the contract, it shall be referred to
applicable law
5. what are the principles of an enforceable contract?
A contract is enforceable only if
- the parties achieve a meeting of minds through a process of offer
and acceptance
- both sides are capable of entering a contract
- the purpose of the contract is legal
6. What is the entire agreement?
Most international contracts include an entire agreement provision
contributed by the background of the contract, contract documents and
definitions.
7. what is the whereas recital? Why is it necessary?
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When the Contract is the entire agreement, the lawyers write the
background of the Contract into it through the whereas-recital.
8. what is discharge by performance?
Is the Contract reaches its end normally
9. what is termination?
Termination occurs when either party pursuant to a power created by
agreement or law puts an end to the contract otherwise than for its
breach.
10. what is cancelation?
Cancellation occurs when either party puts an end to the contracts for
breach. Not any breach allows cancellation by the other party.
11. what is rescission?
Rescission occurs when the two parties agree to end a contract. In legal
theory, they enter a new contract to annul the old contract. The term
rescission is used in other contexts than a mutual agreement to end a
contract, international contract drafting would benefit if it were not
12. what are the ways to slove disputes? Give the definition of each
type?
- Litigation: litigation before the court is internationally the least
attractive: it is public, expensive and time consuming. The results are
often legalistic rather than business like
- Amicable settlement and conciliation: Resolution of Disputes: The
Buyer and the Seller shall make every effort to resolve amicably by
direct, informal, negotiation any disagreement or dispute arising
between them under or in connection with the Contract
- Arbitration: If the two sides cannot reach agreement between
themselves, the resolution of their dispute requires a forum that is a
court of law unless the parties specify otherwise. In practice, most
contract do specify otherwise calling for arbitration
13. what is a panel of arbitrators?
It is courts set up by arbitrators to settle disputes between the parties of
the contract
14. what are the advantages of usuing a panel of arbitrators?
- Privacy
- Business experience of the arbitrators
- Its tendency to be quicker than ligitation (no lengthy appeals
procedure)
15. what are the disadvantages of usuing a panel of arbitrators?
- Costs are extremely high
- Many costs
16. what are the advantages of using a court?

17. what are the disadvantages of using a court?

18. give the definition of contract documents? Give some exemples
It is the documents that the two sides often wish to incorporate
outside material into the contract: letters, general conditions,
Incoterms
19. when do parties to contract have to agree on the language of
contract? What is the agreement
Two roads:
- The parties say nothing at all, in a dispute, the judge decides which
version to trust
- the parties make two version equally authoritative, again, the judge
decides which version to favor
20. what are the conditions for a arbitration panel venue?


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