Deck 5: International Contracts

Question 1

If the country in which an arbitration takes place is one of the 130 signatory countries to the New York Convention on the Enforcement of Foreign Arbitral Awards,then the ruling can be enforced just about anywhere.

Answer 1

True

Question 2

Under the Uniform Commercial Code (UCC),when a buyer agrees to an offer made by a seller,but indicates a desire for a different schedule of delivery or term of payment,such a response is considered to be a rejection of the offer.

Answer 2

False

Question 3

The European Union tends not to recognize exclusive territories that limit an agent or distributor to one country.

Answer 3

True

Question 4

In general,the choice of law,or the choice of which country's laws will regulate a dispute between international parties,is made by the agent or distributor rather than by the exporter.

Question 5

Whether or not a sales contract is international is always self-evident.

Question 6

An agent can negotiate prices,delivery,or other sales terms with the buyer (importer)without direction from the exporter.

Question 7

In most Middle Eastern countries,agents and distributors are not required to be nationals of the country.

Question 8

The "perfect tender" principle means delivered goods must exactly conform to the goods contracted and delivered within the framework specified in the contract.

Question 9

A contract with no determined duration and which can no longer be terminated for non-performance (since termination did not take place earlier,even though there was evidence of non-performance),is called an evergreen contract.

Question 10

A contract is entered in good faith when neither of the parties has any other ulterior motive about the agreement.

Question 11

The scope of appointment clause of a contract usually prevents an agent or distributor to "cherry pick" the most profitable products for extra selling effort and to minimize effort toward less profitable products.

Question 12

The "facilities and activities" clause of a contract between an exporter and an agent/distributor spells out what kind of docking arrangements will be made when the goods arrive by ship into the agent/distributor's country.

Question 13

Agreements between an exporter and an agent and agreements between an exporter and a distributor are called distribution contracts.

Question 14

Normally,contracts between parties who speak different languages from each other can be written in both or all of their languages,and the contracts will have equal weight.

Question 15

Agents usually feel encouraged if the exporting firm they represent retains for itself a large number of corporate accounts.

Question 16

Whenever a contract is established between two parties in the same country,the law governing the execution of this contract is determined by that country's legal system.

Question 17

In contracts with distributors,there are no restrictions on what the exporter and distributor can agree to add on to the wholesale price of the goods.

Question 18

Contracts normally contain a clause that annuls the contract in the event of an overwhelming unforeseen event like a major storm or fire.This is called an evergreen provision.

Question 19

Under the Uniform Commercial Code,an offer can be withdrawn at any time,without prejudice.

Question 20

The scope of appointment clause is usually the first clause of a contract.

Question 21

An exporter's termination of a relationship with an agent/distributor on the basis of "convenience" is

A) essentially risk-free.
B) with little obligation on the part of the exporter to the agent/distributor.
C) easy to accomplish.
D) in little danger of ending up in court.
E) None of the above

Question 22

Lex Mercatoria is

A) a major calamity like a storm or other natural disaster.
B) the Uniform Commercial Code.
C) common law.
D) trade law made up of a multitude of different sources of law and jurisprudence.
E) None of the above

Question 23

A legal dispute in which the loser bears court costs is said to be operating under

A) common law.
B) European rules.
C) contract law.
D) arbitration.
E) None of the above

Question 24

Unless otherwise specified,contracts between an exporter and an agent and contracts between an exporter and a distributor are called

A) contract law.
B) labor law.
C) common law.
D) distribution contracts.
E) None of the above

Question 25

The advertising clause of a contract between an exporter and an agent/distributor spells out the obligations of both parties in the areas of

A) advertising.
B) trade show attendance.
C) ownership of ideas.
D) All of the above
E) None of the above

Question 26

In judging whether or not a contract has been breached,the Uniform Commercial Code (UCC)applies the principle of "perfect tender." This means that

A) there must be a cash exchange to enforce the contract.
B) the UCC treats the matter the same as the CISG.
C) the parties must refer to their oral agreements, not to what they have written.
D) the goods and their delivery must exactly conform to what was written in the contract.
E) None of the above

Question 27

The United Nations Convention on Contracts for the International Sale of Goods (CISG)considers a contract to have been accepted

A) when most of the items in the seller's offer are agreed to.
B) when there has been a counter-offer.
C) when both parties agree to the basic parts of the contract, except for details like price, payment, quality and quantity of goods, shipping instructions, and liability.
D) if the contract is valued at above U.S. $ 500 and is in writing.
E) None of the above

Question 28

A termination of an international contract between an exporter and an agent/distributor can be made by

A) either of the parties.
B) only an exporter.
C) only an importer.
D) only an agent/distributor.
E) None of the above

Question 29

Courts generally look at two criteria to determine if a contract is international.Those criteria are

A) economic and judicial criteria.
B) agent and distributor criteria.
C) physical delivery and monetary exchange criteria.
D) A and B.
E) None of the above

Question 30

An increasingly popular way of settling disputes between international exporter-agent/distributor partners is

A) joint ventures.
B) arbitration.
C) lawsuits in courts in the exporter's country.
D) lawsuits in courts in the agent/distributor's country.
E) None of the above

Question 31

When an international distribution contract between an exporter and an agent/distributor is terminated for "just cause," in most cases the termination is made by the

A) agent/distributor.
B) government of the agent/distributor.
C) exporter.
D) government of the exporter.
E) None of the above

Question 32

Under the United Nations Convention on Contracts for the International Sale of Goods (CISG),when an offer is made

A) it cannot be withdrawn by the buyer or seller before its expiration date.
B) it can be withdrawn at any time before the expiration date.
C) it must be in writing.
D) international courts usually recognize that it can be withdrawn even after the expiration date.
E) None of the above

Question 33

If an international agreement between an exporter and an agent/distributor grants a monopoly to the agent/distributor,that agent/distributor is considered to be

A) operating illegally.
B) a subsidiary of the exporting company.
C) an exclusive representative.
D) operating under a force majeure clause.
E) None of the above

Question 34

A termination for "convenience" is

A) illegal.
B) a termination for any reason other than non-performance.
C) a simple process about which the exporter should not have to worry.
D) usually accomplished with good feelings on both sides.
E) None of the above

Question 35

Contracts contain a force majeure clause which dissolves the contract in the event of a major unforeseen event,like a ship sinking in a storm.Loosely translated,force majeure means

A) "forced dissolution."
B) "overwhelming power."
C) "major provisions of contract no longer in force."
D) "major forfeit."
E) None of the above

Question 36

When a party to a contract is continually looking for loopholes to avoid living up to the obligations of that contract,it can be said that

A) the laws of the country of the importer should apply.
B) the laws of the country of the agent/distributor should apply.
C) that party is not acting in good faith.
D) All of the above
E) None of the above

Question 37

While an exporter and distributor can agree on what the distributor can add for margin on the wholesale price of goods,in agency contracts

A) commissions are limited to U.S.$ 1.2 million per quarter.
B) the commission is limited to 12 percent.
C) the commission is whatever the agent decides it should be.
D) commissions are set by the UCC.
E) None of the above

Question 38

The most sensitive issue in an international distribution contract between an exporter and an agent/distributor is

A) termination.
B) advertising.
C) territories.
D) product line.
E) None of the above

Question 39

An agreement between an exporter and an agent/distributor may state that the laws of the exporter's country apply to governing of the contract.This can be complicated by

A) the practice of many exporters to bribe the judges in their home countries.
B) a shortage of lawyers in the exporter's home country.
C) it being illegal for the exporter to make such an agreement.
D) the government of the country where the agent/distributor is located, as it may say it has jurisdiction over the contract.
E) None of the above

Question 40

Instead of using courts to settle disputes,an increasing number of contracts call for disputes to be settled by

A) international law.
B) diplomacy.
C) an arbitration panel.
D) the Uniform Commercial Code.
E) None of the above

Question 41

A facilities and ____________________ clause in a contract spells out what the exporter and the agent/distributor have agreed upon with respect to the type of establishment the agent/distributor will maintain.

Question 42

When a territory clause in an international distribution contract makes an agent/distributor an exclusive representative,it essentially grants a ____________________ to the representative.

Question 43

The main reason some countries use specific statutes to regulate international distribution agreements is that they feel they need to ____________________ agents and distributors.

Question 44

A ____________________ notice spells out how many days the exporter must give the agent/distributor before their termination becomes effective.

Question 45

How trade secrets and other strategic advantages are to be handled is included in a _____________________ clause of a contract.

Question 46

The contract clause that spells out if a representative will be an agent or distributor is usually the first clause of the contract and is called the _____________________ of appointment clause.

Question 47

Accounts that the exporter will keep to itself and will not allow the agent/distributor or any other local representative to sell to are called ____________________accounts.

Question 48

A complex multitude of international agreements and international trade laws which complement domestic laws is a form of trade law called ____________________.

Question 49

An arbitration panel is usually made up of ____________________ arbitrators.

Question 50

Normally,an exporter pays the agent's commission when the ___________________ pays the exporter.