Answerkey Exporting and the Export Contract

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CHAPTER 1 DELIVERY 1. What are 5 steps in negotiating delivery? Timing - Location - Transport - Risk, Title and Insurance - Terms of trade 2. Why is location important? Because it’s where the risk and responsibilities are passed. And date of payment depends on place of delivery. 3. Why is transportation important? Because suitable mode of transport will reduce the cost; moreover the transport which is appropriate to the goods ensures the goods to arrive safely. 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…show more content…
How to set the Defect Liability Period? It’s likely to be several months form the date of delivery or date of arrival. 10. What is patent ( open defect)? It’s a visible deficiency which is discoverable upon its inspection. 11. What is latent ( hidden ) defect? It’s defect that only comes into light after a defined amount of time (after using or acceptance) 12. Give some examples of patent defects Wrong items, broken or missing parts, scratches... 13. What are Implied Warranties? Certain assumptions about goods even if the exporter gives no express warranty. 1. How does the L/C protect both the exporter and importer? For seller, he can get payment by a bank if he made an agreed shipment For buyer, he doesn’t have to pay until the seller make the delivery. 2. Differences between open account secured by the export credit insurance and an open account secured by the bank guarantee? In ECI, the third party security for payment is an insurance company, and the seller pays the costs. In bank guarantee, the third party security for payment is a bank, and the buyer pays the costs. 3. Differences between Time and Deferred L/C? Time L/C uses time draft. When the exporter presents the Time L/C to the bank, the bank will stamp across the face of the time draft and will pay the bill when it matures (after a period

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