Câu 1: (Page 26) When does a contract come into force?

The contract comes into force when all preconditions for the sale have been met
- Receipt of import and/or export approval.
- Receipt of foreign exchange approval from a central bank.
- Issuance of a letter of credit or bank quarantee.
- Making a down-payment by the Buyer.
- Issuance of an insurance policy.
- Issuance of a certificate of origin.
- Delivery by the Buyer of plans, drawings or other documentation.
Câu 2: Compare between the signature date and the date of coming into force of the
contract.

- Signature date or Date of execution: The contract is to be binding from this day.
- Date of coming into force or Effective date: not usually a calendar date, but the date on which
the last precondition is met.
Câu 3: What is a cut off date (ngày chấm dứt)

A cut-off date: the date by which if the Contract has not come into force within a certain period
of time from signature, it shall be deemed (to be considered) NO CONTRACT or null and
void.
P.27; In what kind of contracts is a cut-off date set?

A cut-off date is set in fixed-price contracts.

A long delay may make the price unrealistic.
Grace period

- Definition
A grace period is a period during which a penalty for late delivery is waived. (Miễn)
- Advantages
o Grace period is sometimes used to facilitate early delivery.
o Buyer gets the goods and exporter receives payment up to a month earlier than planned.
Câu 4: (Page 30) What are the 3 outcomes of FM?

- Resumption of delivery (resume to make delivery)

- Termination of contract
- Unclear and dangerous situation
Câu 5: Compare solutions for late delivery

Liquidated damages Penalty Quasi-indemnity

Fair amount to the real Higher than the real loss Lower than the real loss
Amount
loss
To compensate the buyer To terrorize (force) the To relieve the exporter of
Purpose
fairly for any delay in exporter into punctual liability for delay in delivery
(motive)
delivery delivery
 Enforceable everywhere Not enforceable in Enforceable everywhere but
but subject to increase or English law and other open to challenge as
Enforeable decrease in some legal common law “unconscionable”
systems

Câu 6: B/L is acceptable as a shipping document for L/C payment

What is noted on a marine B/L so that it is acceptable as a shipping document under payment by
L/C?
- Marine B/L must be clean
- It must notation: Shipped on board a named vessel
Câu 7: How can a B/L be made negotiable?

Typing the word “to order” in the consignee box and the consigner/shipper endorses the B/L
Câu 8: Unclean/clean shipping document (what notes make B/L unclean?)

The Goods, packaging and general appearance are inspected by a carrier.

Common notes include:
- Contents leaking. Hàng bên trong bị rỏ rỉ
- Packaging soiled by contents. Bao bì bị bẩn do hàng bên trong ngấm ra
- Packaging broken/holed/torn/damaged. Bao bì bị vỡ / thủng / rách / hư hỏng
- Packaging contaminated. Bao bì bị nhiễm bẩn
- Goods damaged/scratched. Hàng bị hư hỏng/xước xát
- Goods chafed /torn/deformed. Hàng bị chà xát / rách / biến dạng
- Packaging badly dented bao bì bị móp méo nặng
- Packaging damaged- contents exposed bao bì bị hư hỏng - lộ hàng
- Insufficient packaging bao bì không đủ

Clean B/L means that there are no notes about defect in the Goods. Goods are received in perfect
condition
(phê chú xấu)
(*) Not all notes are considered to be 'claused'.
Examples:
There are 4 notes which do not make B/L unclean
- Second-hand/reconditioned packaging materials used.
- Packaging repaired/mended/resewn/coopered
- Unprotected.
- Unboxed.
Câu 9: Floating Policy vs Open Cover

- Both offer exporter insurance cover on all shipments over time period.
- A ceiling is set on the overall figure - for example, $1 million.
- Such ceiling is automatically reduced by the value of each shipment once it is made.
 - Differences
o Floating policy is set up for a particular time and automatically expires unless being
renewed. Open cover is open-ended. It does not expire although there are provisions for
cancellation on due notice => Open cover is more convenient.
o Open cover is not an insurance policy at all. With open cover, a certificate of insurance
is normally issued. If you need a policy, you must request it.
Câu 10: Valued policy vs Unvalued policy

- Valued policy is the policy in which the exporter states the value of the goods on the insurance
document.
- Unvalued policy is the case where the exporter did not state the value of the goods being
insured with the insurer. Then the value of the goods can be established after a loss. The exporter
must prove his figures precisely. As long as the figure is less than the total cover under the
policy, the insurer shall pay.
- Valued policy is preferred today because the pre-stated figure can include not only the cost of
the goods but also the profit the exporter hoped to make on them.

 Valued: the value of the Goods is stated on the Insurance document

Unvalued: …isnt not…
Câu 11: Cargo clause A,B, or C (Bảo hiểm loại A,B,C)

Developed by the International Chamber of Commerce as a means of insurance for cargo in

transit from original location to its final destination.
- Institute Cargo Clause A is considered the widest insurance coverage => The insured pays the
highest premium for total coverage. - widest coverage
- Institute Cargo Clause B is considered a more restrictive coverage => The insured expects to
pay a moderate premium because only the more valuable items in the cargo is covered or only
partial cargo coverage. - minimum coverage
- Institute Cargo Clause C is considered the most restrictive coverage => The insured pays the
lowest premium.
Câu 12: Which risks are generally excluded from Cargo Clause A? (Ask)

•willful misconduct of the insured/ assured, hành vi ác ý của ng đc bảo hiểm

• Ordinary leakage, loss of weight, fair wear and tear, rò rỉ thông thường, hao hụt trọng lượng,
hao mòn tự nhiên
• Poor/improper packaging, bao bì kém ….
• inherent vice in the goods, lỗi ẩn tì của hàng
• delay, chậm trễ
• insolvency of carrier, ng chuyên chở bị mất khả năng thanh toán (bankruptcy of ship owner)
• use of nuclear weapon, sd vũ khí hạt nhân
• war risk, rr về chiến tranh
• strike risk. Rủi ro về đình công
Câu 1: Give examples of the changes that lead to an increase in the price of the
exporter's Goods?

Large order to small order

More sophisticated specifications like a wider range of colors, or more flavours etc.
More packaging and labeling.
Change in terms of trade like from FOB to CIF or EXW to FOB etc.
Change in terms of payment like from Letter of credit to open account (trả sau – higher price).
Sooner date of delivery.
Longer warranty period/defects
Câu 2: OPEN ACCOUNT

- O.a means that the Goods are shipped and delivered before payment is due.
- O.a is acceptable when:
o The parties have well-established business relation
o The buyer is creditworthy
o Political stability in the buyer’s country
- The biggest risk for the exporter in o.a payment is non-payment
Câu 3: O.A is favor by the buyer why

Câu 4: advance payment is favor by seller, why

Which method of payment is most favoured Which method of payment is most favoured
by the buyer? Why? by the seller? Why?

Open account. Because the Buyer doesn't Advance payment. Because the seller can
have to pay immediately after receiving the receive payment before delivering the goods
goods. to the buyer
Third party security for payment:

o Export credit insurance

The seller -> insurance company -> insure its contract
o Payment guarantee
The buyer -> the bank -> guarantee its payment obligation
Export credit insurance Payment guarantee

Who issue Insurance company The bank

Who pay the cost Exporter Importer
What for / the purpose If the buyer fails to pay, the If the buyer fails to pay, the
insurance company will pay the bank will pay the exporter
exporter
Câu 5. How does e.x.i works and limitations

- Pros and cons

Pros
- Reduce the risk of non-payment by
foreign buyer
- Offer open account terms safely in the
global market
Câu 6: Export insurance premium
Cons
- A long wait (6 months is typical)
- Unlikely to cover 100% of the original
invoice
- Importer engages in “bad faith”
behavior

o Insurance fee: the exporter has to pay insurance premium (phí bảo hiểm)
o Vary according to:
 Types of Goods exported
 Creditworthiness of the Importer
 Political stability of the Importer’s country
 Normally between 0.5% and 1% of the invoice price
Câu 9: What are the 4 bank guarantee in business?

- Payment guarantee: bảo lãnh thanh toán

- Tender guarantee: bảo lãnh dự thầu
- Performance guarantee: bảo lãnh thực hiện hợp đồng
- Prepayment guarantee: bảo lãnh tiền đặt cọc
Risk involved Guarantee Purpose Value of guarantee
Non-payment Payment g. The bank commits to pay if the 100% of the contract
of the importer Buyer defaults price
Revocation Tender g. Protects the Employer against the 1.5%-5% of the
(hủy thầu) risk of a project falling behind as contract price
Revoke (v) a tender is withdrawn
(=cancel)
Non- Performance g.
Pay the costs if the Contractor 5%-10% of the
performance fails to perform contract price
Losing Prepayment g. Ensure the prepayment to the 100% of the
prepayment Importer of an agreed percentage prepayment
of the contract amount
Câu 10: compare payment vs prepayment
 - Payment g. vs Prepayment g.
Payment g. Prepayment g.
Risk involved Exporter’s losing payment Importer’s losing prepayment
Principle (bên mua Importer Exporter
bảo lãnh)
Beneficiary Exporter Importer
Guaranter Importer’s bank Exporter’s bank
Câu 11: Guarantee without demur or objection (Demand guarantee: bảo lãnh khi yêu
cầu / on demand) vs Conditional guarantee (ask)

Guarantee without demur or objection Conditional guarantee

"without demur or objection" means "on firstA Conditional Guarantee is a guarantee from a
demand". Whenever the beneficiary demands bank but with serious, objective conditions that
payment under the guarantee, the bank will must be met before payment by the bank is
pay. possible.
3 objective conditions:
- A decision of the court: phán quyết của
tòa án
- An arbitral award: phán quyết của trọng
tài
- The approval of the Principal in writing
to the claim: chấp thuận của bên yêu
cầu bảo lãnh bằng văn bản
Câu 12: What is a Letter of Credit? Why it is also called Documentary Credits?

- A Letter of Credit is a binding agreement by a bank to pay a certain sum of money when the
exporter presents the necessary documents to the bank. In a letter of credit transaction,
documents are exchanged for money so they are formally called Documentary Credits.
Câu 13: What makes a L/C watertight? (Chặt chẽ)

- Autonomy
L/C is an agreement by a bank to pay money against documents. It is a separate agreement from the
sales contract and is unconnected with it
- Strict compliance
The bank will pay only if the shipping documents are exactly in line with the buyer’s instructions stated
in the terms of the L/C
Câu 14: What are the problems with L/C which cause discrepancy? (7)

- Documents required by the credit are missing

- Documents required to be signed are not signed
- Documents are not presented within the required time
- The credit amount is exceeded
- The credit has expired
- Shipment was short
- Shipment was late
Câu 15: Problems with the Bill of lading: (6)

- The B/L is “unclean” it has comments on it relating to damage to or other deficiencies in the
goods
- A marine B/L is required, but the bill does not state that the goods were 'shipped on board a
named vessel'
- The B/L shows shipments between ports other than those specified in the credit
- The B/L shows that the goods were shipped on deck. This is normally forbidden unless the credit
expressly allows it.
- The B/L offers no evidence that freight was paid by the exporter (if this was required)
- There is no endorsement (if endorsement is necessary)
Câu 16: Problems with Insurance: (5)

- The insurance document is not of the type specified in the credit (e.g., a certificate of insurance is
produced while the credit calls for a policy)
- The insurance risks are not those specified in the credit
- Insurance cover is expressed in a currency other than that of the credit. This is normally
forbidden unless the credit expressly allows it.
- The sum insured is below the figure required
- Insurance cover does not begin on or before the date of the transport document.
Câu 17: When does "discrepancy" occur in payment? (what causes discrepancy in
payment?)

What are the possible outcomes of discrepant documents?

Discrepancy occurs when documents presented under an L/C do not conform with L/C requirements OR
do not conform with one another
- Outcomes:
o issuing bank refuses to pay
o beneficiary contacts applicant to amend L/C
o beneficiary alters documents to comply with L/C requirement
Câu 18: Confirmed L/C vs Unconfirmed L/C (ask)

- A confirmed L/C has double guarantee if it is guaranteed by the second bank in addition to the
issuing bank
- An unconfirmed L/C is guaranteed by only one bank, the issuing bank
Câu 19: Partial shipments vs Shipment in installments - ask

Partial shipment Shipment in installments

A partial shipment is simply an incomplete Shipment in installments means that an
shipment with some part of the goods to follow agreed schedule has been set up, for example,
later. three equal shipments in March, August and
October 2023