Terms and Conditions of Purchase or Sale/Assessment

Unit 5.1-Terms and Conditions of Purchase or Sale

Introduction | Modes of Entry | Terms of Sale | Applying Your Knowledge | Commercial Agreements | Summary | Resources | Activities | Assessment Go to Unit 5.1 | Unit 5.2 Return to Trade Finance Module 5: Selecting Payment Methods

Assessment

1 As part of the terms and conditions of the sale, an international manager must consider

	the advantages and disadvantages of the methods of payments.
	whether the buyer or seller is writing the contract.
	only when the products will be shipped and the price.
	the creditworthiness of the buyer and the political risk of the country.

2 Laws governing international contracts known as jurisdiction

	should be an neutral country.
	are executed in the buyer’s country.
	are executed in the seller’s country.
	should be identified in the contract.

3 The type of distribution agreement established between the buyer and seller will

	include only the minimum points in order to make the transactions easier.
	include the same components whether it is a joint venture or agent agreement.
	include specific components as they relate to type of relationship.
	include only the minimum points to avoid huge legal fees.

4 The Incoterms help define

	who is responsible for legal costs in case of a dispute.
	who is responsible for the marketing costs for the goods.
	who is responsible for the product warranties.
	most of the responsibilities and costs of the buyer and seller.

5 The United States agrees to ship wheat to Russia in exchange for oil from Russia after three years the exchange will be balanced between the two countries. Which best describes this type of transaction.

	Bilateral arrangements
	Consignment
	Advance purchase
	Buy backs

6 The buyer has placed US$50,000.00 in an escrow account for the purchase of goods from the seller. Which best describes this type of transaction.

	Consignment
	Advance purchase
	Bilateral arrangements
	Buy backs

7 15,000 chickens are received in exchange for 25,000 umbrellas This type of transaction is best described as:

	Bilateral arrangements
	Counterpurchase
	Barter
	Buy backs

8 A jewelry manufacturer places some of the manufactured goods with a retail store in the hopes of selling it. This type of transaction is best described as:

	Consignment
	Counterpurchase
	Bilateral arrangements
	Buy backs

9 The United States agrees to provide US$14 million worth of missiles and purchase US $5million in oil from Saudi Arabia. Which best describes this type of transaction.

	Consignment
	Counterpurchase
	Bilateral arrangements
	Buy backs

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