CHAPTER 1: MORE EXERCISES

I. General Questions

1. What is the amount of Liquidated damages

compensation usually set in
advance?

2. What is a grace period? What - A grace period is a time past the deadline for an obligation
is excusable delay nearly during which a late penalty that would have been imposed
always subject to? is waited

- Force majeure provision

3. What is a penalty clause? A clause whose purpose is not to compensate but to punish
and is designed to give the contractor a significant financial
advantage if the terms of a contract are breached

4. What is the purpose of a quasi- To relieve the exporter of liability for delay in delivery
indemnity?

5. In delivery, what are the main It ensures the physical safety of the goods and provides
roles of transportation? correct documentation

6. Should the requirements of For the goods to arrive safely, correct packaging and
packaging and marking be shipping marks are essential. Such matters are often made
mentioned in the sale contract? the subject of a separate clause in the export contract
because claims arising from delay or damage can be
settled only if it is clear who is responsible for packing and
marking.

7. Why does the shipping Because the bank will refuse to pay if the shipping
documents correspond exactly documents are in any way incorrect
with the conditions of the letter
of credit?
8. Before paying a claim for loss,
what should insurers do?
9. What is the unvalued policy?
 10. What risks does General
Exclusion Clause exclude?

II. Gap-Filling
1. If the parties must wait for the contract to become date P37
effective, the delivery date often depends on the
....................... of coming into force.
2. Some contracts (especially fixed-price contracts) cut-off P37
set a ................... date after which the contract
cannot come into force.
3. A ................... period is sometimes used to grace P37
facilitate early delivery.
4. A force majeure clause often ............. the exporter relieves (P37)
of his duty to deliver until the force majeure event
is over.
5. If the force majeure event continues for too long, terminate P37
both parties should have the right to ...................
the contract.
6. To avoid the cost and uncertainty of proceedings (P37
legal ..................., many contracts regulate in
advance the compensation for late delivery.
7. A ................... is not enforceable in Anglo- penalty (P34)
American courts, though the quasi-indemnity is
usually enforced.
8. The contract should ....................... the type of specify (P54)
packaging and the shipping marks agreed by the
parties.
9. On delivery, the exporter receives from the carrier shipping (P54)
the most important of all the .......................
documents, the bill of lading (or consignment
note).
10. Each mode of transport has a ....................... characteristic (P54)
shipping document: the marine bill of lading, the
air waybill, the rail consignment note, and the road
consignment note are the most common.
Combined transport (container transport) uses a
 combined transport bill of lading.
11. The marine bill of lading, to be acceptable as a named (P54)
shipping document under a letter of credit, must
bear the notation that the goods have been shipped
on board a ....................... vessel.
12. Payment under a letter of credit depends largely on correctness (P54)
the ....................... of the shipping documents.
13. Payment under a letter of credit may be delayed if failed (P54)
the letter of credit repeats exactly the contractual
packaging requirements but the exporter has
....................... to meet them.
14. 8. The carrier will note any ....................... in the defects (P54)
packaging, weight or general appearance of the
goods on accepting them from the exporter. (The
carrier does not inspect the goods themselves, only
the packaging.)
15. In CIF and CIP contracts, the exporter must pay port of delivery (p64)
for insurance from ....................... to the named
point of arrival.
16. The insured can make three kinds of arrangement the floating policy
with the insurer: the tailor-made policy,
....................... and the open cover.
17. The main principle of insurance is ....................... utmost good faith
18. A ....................... has three variant clauses: Cargo marine
Clauses A, B and C. Clause A covers anything not
excluded; clauses B and C exclude anything not
expressedly covered.
19. ....................... issues Incoterms to standardize ICC (International Chamber of
delivery procedures. Commerce)
20. A “held covered” clause offers some protection misdescription
against .......................

III. True / False (If any)

1. A systematic approach to negotiating delivery avoids the danger of T (P24)
the parties overlooking important issues
2. A grace period is sometimes used to avoid early delivery. False P37
 A grace period is
sometimes used to
facilitate early
delivery.

3. Late delivery causes loss to the buyer-loss that can be compensated False P37
Late delivery causes
loss to the buyer—
loss that must be
compensated.
4. A lump-sum compensation is normal in case of late delivery. It may F P37
be set too high as quasi-indemnity The lump-sum may
be set too high
(penalty),
about right
(liquidated
damages), or too low
(quasi-indemnity).

5. If the bill of lading is claused, payment will be delayed.

6. The Carrier shall be liable for any damage to or loss of the Goods
attributable to improper or defective packaging.
7. Packaging of dangerous goods is subject to special regulations in all T P43
countries. Packaging of
dangerous goods is
subject to special
regulations in
all countries. The
exporter should ask
for instructions from
the buyer if
dangerous goods are
in question.

8. Some of the marks in packaging relates to government regulations. 8.

9. Many exporters have an agreement with an insurance company 9.
covering all their shipments over a period of time.
10. Under English law at least, the effect of a certificate insurance is 10.
virtually different with that of a full policy.
11. The floating policy offers the exporter insurance cover on all 11.
shipments over a period of time whereas the open cover does not.
12. FOB, Incoterms 2010, states that the seller is required either to 12.
deliver the goods on board the vessel or to procure goods already so
delivered for shipment.

IV. Matching
A B
1. The BUYER shall advise the a. then the SELLER may at his discretion deliver
SELLER the name the Goods to a bonded warehouse
2. If the vessel named by the BUYER b. of the full circumstances of the Delivery to the
fails to arrive on or before July 30th, warehouse
3. Goods are to be packed in ….and c. shall be marked: the package number, gross
are to be weight, net weight, the lifting position
4. With Delivery to the warehouse, all d. purposes of inspection at a reasonable time
costs, including agreed by the parties.
5. On the surface of each package e. well protected against damping, shock, rust or
delivered under this Contract rough handling.
6. The SELLER shall permit access to f. of the vessel not later than 07 Days before the
the Goods for agreed Delivery date.
7. In this event, the SELLER must g. but not limited to cost of storage and insurance
notify the BUYER are to the BUYER’s account.
8. To allow payment at early stage, h. the goods have been loaded on board a named
vessel.
9. The most important shipping i. there is no reason for a negotiable bill of
document is issued by the carrier lading.
10. Since containers move by road, rail, j. international commerce has developed the
ship and air, letter of credit.
11. A trucking company issues k. when the exporter hands over the goods for
transportation.
12. A marine bill of lading must l. the person who holds it has title to the goods
 indicate that described.
13. The marine bill of lading can be m. a combined transport bill of lading is used to
made a negotiable document as cover multi-mode transport.
14. If the consignee intends to receive n. a road consignment note on taking over the
the goods personally, goods.
15. A certificate of insurance o. a letter from the exporter to the buyer stating
that the goods are insured.
16. One disadvantage of the floating p. states in outline the cover offered and gives the
policy is that details of the individual shipment

17. The valued policy means that q. the goods shipped in an unseaworthy vessel are
not insured
18. A letter of insurance is r. it is set up for a particular time and
automatically expires unless renewed.
19. Improper packaging means that s. the exporters stated the value of the goods on
the insurance document.

20. The Unseaworthiness and Unfitness t. the damage resulting from improper packing
Exclusion Clause says that or preparation is not covered

V. English – Vietnamese Translation

1. One of these Combined Transport Bills 1.
of Lading must be surrendered duly and
endorsed in exchange for the goods.
2. In Witness whereof the original 2.
Combined Transport Bills of Lading of
this tenor and date have been signed in
the number stated below, one of which
being accomplished the other(s) to be
void.
3. The remarks in a claused document make 3.
it unacceptable to a bank; a letter of
credit will not be paid against a claused
shipping document.
4. Courts in several countries have ruled 4.
 that the carrier who accepts such an
indemnity… is an accomplice in deceit or
fraud on the buyer and the indemnity
itself is illegal and void.
5. Shipper certifies that the particulars on 5.
the face hereof are correct and that
insofar as any part of the consignment
contains dangerous goods, such part is
properly described by name and is in
proper condition for carriage by air
according to the applicable Dangerous
Goods Regulations.
6. Seller will inform Buyer promptly of any 6.
occurrence which will or may result in
any delay of delivery at any time or
which will or may result in Seller's
inability to fulfill the quantities specified
in the Purchase Order
7. The custom of the port will decide the 7.
extent to which loading costs under FOB
should be distributed between seller and
buyer. If this is known to both parties, no
difficulties should arise.
8. The terms DES and DEQ are traditional 8.
for carriage goods by sea. The former
means that the buyer must take the cargo
out of the ship, whereas the latter places
the burden on the seller to ensure that the
goods are discharged on to the quay.
9. Any dates quoted for delivery of the 9.
goods are approximately only and the
supplier shall not be liable for any delay
in delivery of the goods unless being in
delay more than two weeks from the
agreed approximate delivery date and
having received the Buyer’s written
notification.
10. Seller agrees to take all actions necessary 10.
 and appropriate to ensure that goods are
received by Buyer as required under the
relevant Supply Contract.

VI. Vietnamese – English Translation

1. Việc giao hàng tùy thuộc vào việc tàu 1.
đã sẵn sàng để chở hay đã có khoang
trống trên tàu để tiếp nhận hàng chưa.
2. Bất kỳ mặt hàng, thiết bị, cấu phần bất 2.
kể là ở nước của người sản xuất hay nơi
khác trong phạm vi kiểm soát của người
bán sẽ phải được kiểm tra trước khi giao
hàng và trải qua khâu kiểm nghiệm dưới
sự giám sát của SGS
3. Người bán có thể tùy quyền định đoạt 3.
của chính mình sắp xếp cho tàu chở
hàng hoặc khoang chứa hàng, giao hàng
đi mà không ảnh hưởng đến những
quyền khác hay các biện pháp khắc phục
lỗi khác mà người bán có thể phải thực
hiện theo hợp đồng này.
4. Ngày giao hàng được thể hiện trên vận 4.
đơn sẽ là bằng chứng cho thời điểm giao
hàng.
5. Trường hợp không có bằng chứng cho 5.
trường hợp ngược lại, sự chậm trễ trong
trường hợp này là có thể chấp nhận được
cho dù ngày giao hàng có là ngày làm
việc bình thường không.
6. Thông báo giao hàng cuối cùng: trong 6.
vòng 24 giờ kể từ lúc giao hàng, người
bán có nghĩa vụ phải thông báo bằng thư
tín, điện tín: số hợp đồng, số lượng,
trọng lượng tổng cộng, trọng lượng tinh,
kích thước, số gói hàng, trị giá hóa đơn,
tên con tàu chuyên chở, số vận đơn,
ngày tàu chạy.
7. Người mua có quyền cho Vinacontrol 7.
kiểm tra hàng hóa ở nơi đến, nếu có bất
kì sự sai biệt nào phát sinh liên quan đến
số lượng và chất lượng, trước tiên người
mua phải khiếu nại người bán dưới hình
thức telex.
8. Thỏa thuận này phải có hiệu lực sau khi 8.
hai bên kí hợp đồng vào ngày cần có sự
phê duyệt của các nhà chức trách có
thẩm quyền ở quốc gia của người mua
và người bán.
9. Nếu hợp đồng không có hiệu lực trong 9.
vòng 90 ngày kể từ khi hai bên kí hợp
đồng, thì nó sẽ trở nên hết hiệu lực.
10. Sự tuân thủ về thời gian là điều kiện tiên 10.
quyết để hợp đồng có hiệu lực.