1、#*Chapter 2 International Trade Terms1 2 3 4 5 6 7 8 9 10I. Multiple choices B C A C C D A B C DII. True or false statements T T F F T F F F F TIII. Explain the following terms1. shipment contractShipment contract is a contract using an Incoterm which indicates that the delivery happens at the time
2、or before the time of shipment.2. symbolic deliverySymbolic delivery is a delivery situation in which when the seller delivers the buyer does not physically receive the goods. This kind of delivery is proved by the submission of transport document by the seller to the buyer.3. arrival contractArriva
3、l contract means a contract using an Incoterm which indicates that the delivery happens when the goods arrive at the destination.4. actual deliveryActual delivery refers to a delivery situation in which when the seller delivers the buyer does physically receive the goods.IV. Short questions1. Who pa
4、ys for loading for shipment under FOB ?The seller.2. Who pays for unloading under CIF?The buyer.3. Compare and contrast FOB, CFR and CIF?Similarities: a. The sellers risk will be transferred to the buyer when the goods are loaded on board, b. The seller is responsible for export customs formalities
5、while the buyer is responsible for import customs formalities, c. The buyer is responsible for unloading the goods at the port of destination, d. All three terms can only be used for waterway transportation.Differences: a. FOB requires the buyer to arrange and pay for the ocean transportation; CFR r
6、equires the seller to arrange and pay for the ocean transportation; CIF requires the seller to arrange and pay for the ocean transportation and insurance against the buyers risk.4. What are the two types of trade terms concerning the transfer of risks?Shipment contract terms vs. arrival contract ter
7、ms. Under shipment contract terms the sellers risk will be transferred to the buyer before the goods depart from the place/port of shipment. Under arrival contract terms the seller will bear the risk of the goods until the goods arrive at the destination.5. What are the differences and similarities
8、between CPT and CFR?Major similarities: a. The seller should contract and pay for the major carriage. b. The seller is not taking the risk of loss of or damage to the goods during the transportation.Difference: a. CPT is applicable to any kind of transportation mode while CFR is only used for waterw
9、ay transport, b. Under CPT the sellers risk will be transferred to the buyer when the goods are handed over to the first carrier nominated by the seller. Under CFR the sellers risk will be transferred when the goods are loaded on board the vessel.6. What are the differences and similarities between
10、CIP and CIF?Major similarities: a. The seller should contract and pay for the major carriage. b. The seller is not taking the risk of loss of or damage to the goods during the transportation, c. The seller must obtain insurance against the buyers risk.#*Difference: a. CPT is applicable to any kind o
11、f transportation mode while CFR is only used for seaway or inland waterway transport, b. Under CPT the sellers risk will be transferred to the buyer when the goods are handed over to the first carrier nominated by the seller. Under CFR the sellers risk will be transferred when the goods are loaded o
12、n board the vessel.7. If you trade with an American, is the sales contract subject to Incoterms without any doubt? What should you do?No. The Revised American Foreign Trade Definitions 1941 is still in use, especially in the North American area. It has different interpretation about some trade terms
13、. The traders should clarify the choice of rules before any further discussion.8. What are the most commonly used trade terms?FOB, CFR b. Commission mainly applies to transactions which involve middleperson or agent. Discount can be used without particular prerequisites.4. When will an offer be term
14、inated?An offer will be terminated when: a. it is legally terminated (being withdrawn or revoked); b. it is not accepted by the offeree within the validity period or a reasonable period of time; c. it is rejected by the offeree; and d. some uncontrollable events happen, preventing the offeror from f
15、ulfilling his obligations.5. What are the possible modifications a counteroffer may make to an offer?If a reply to an offer makes modifications in the following aspects, the reply will be considered as a counteroffer: _ price and payment; b. quality and quantity of goods; c. place and time of delive
16、ry; d. extent of one partys liability to the other; e. settlement of dispute. V. Case studies1. Under the price of USD25.5/dozen CFR Rotterdam BB Company signed a contract to sell 1 000 dozens of T-shirt. The T-shirt was purchased from factory by RMB135/dozen. BB Company calculated 3 % of its produc
17、t purchasing price as its overhead costs. The local transport and customs formalities took RMB2 500 and the container ocean freight was USD1 500. If the bank exchange rate was 1USD/6.5RMB, what would be the export profit margin for this deal? And what about its export cost for foreign exchange?expor
18、t profit margin: 9.26% ; export cost for foreign exchange : 5. 897Export profit margin= Export revenue ( FOB ) - Export cost ( FOB )/ Export revenue (FOB)Export Cost for Foreign Exchange =Export Cost in Local Currency/ Export Revenue in Foreign Currency2. The price quoted by a Shanghai exporter was
19、“USD1 200 per M/T CFR Liverpool“ The buyer requested a revised FOB price including 2% commission. The freight for Shanghai-Liverpool was USD200 per M/T. To keep the export revenue constant, what would FOBC2% price be?FOBC2% Shanghai USD1 020. 41/M/TFOBC% = FOB/( 1 - Commission)3. AC Company offered
20、to sell goods at “USD100 per case CIF New York“. The importer requested a revised #*quote for CFRC5 %. The premium rate for insurance was 1.05 % and mark-up for insurance was 10%. To get the same export revenue, what would ACs new offer be?CFRC5% New York USD104. 5/caseI = CIF x 110% x RCFRC% = CFR/
21、( 1 - Commission)4. DD Company offered to sell goods at “USD2 000 per M/T CW Toronto with all risks and war risk for 110% of the value“. The importer requested a revised quote for FOB Guangzhou. The freight for Guangzhou-Toronto was USD50 per M/T, and the premium rates for “all risks“ and “war risk“
22、 were 1% and 0. 2% respectively. To get the same export revenue, what FOB price should the exporter offer?FOB Guangzhou USD1 923.6/M/TI =CIF x 110% x RCIF = FOB + Freight + Insurance5. The price quoted by an exporter was “USD450 per case FOB Shanghai“. The importer requested a revised quote for CIF
23、Auckland. If the freight was USD50 per case, 110% of the value was to be insured, and the premium rate for insurance was 0. 8%, what would the new price be?CIF Auckland USD504. 44/caseCIF = CFR/( 1 - 110% x R)CFR = FOB + Freight6. X Company signed a contract to export two machines at an initial pric
24、e (P0) of USD5 million each. At the time of setting P0, the material price index (M0 ) was 110, the wage index (W0 ) was 120. The contract contained a price revision clause that allowed the final price to be set on delivery.At the time of delivery, the material price index (M) was 112, and the wage
25、index (W) became 125. If the following ratios remained constant:A (the management fee and profit as a percentage of the price) = 15%B (the material cost as a percentage of the price) =30%C (the wage cost as a percentage of the price) = 55 %What is the final price (P) ?USD5.14 millionP = P0. ( A + B.
26、 M/M0 + C. W/W0 )7. On Nov. 20th, Lee Co. offered to sell goods to Dee Inc. at USD500 per case CIF London, “Offer valid if reply here 11/27. “ On Nov. 22nd Dee cabled back, “Offer accepted if USD480 per case. “ As Lee was considering the bid, the market price went over USD500. On Nov. 25th, Dee cabl
27、ed an unconditional acceptance of Lees initial offer. Could Lee reject Dees acceptance?析：1)11 月 22 日 Dee Inc的回复对价格进行了更改，因此这是一个还盘。当 Dee Inc对报盘进行还盘，原来的报盘就自动中止了。在这个前提下，Lee Co可以采取任何行动而不须顾虑先前的报价。2)尽管 Dee Inc在原报盘的有效期内又发出了一个无条件接受报盘的回复，但由于之前他们已经进行了还盘，所以此时的接受无效。答案：Yes 答题切入点：1)还盘的定义； 2)报盘中止的因素。8. X offered to
28、 sell goods to Y, “Shipment within 2 months after receipt of L/C, offer valid if reply here 5 days. “ Two days later, Y cabled back, “Accept your offer shipment immediately. “ X didnt reply. Two more days later, X received Ys L/C requiring immediate shipment. At this time, the market price of the go
29、ods went up by 20%. What options did X have to deal with Y?析：1)Y 在两天后的回复中虽然声明接受报盘，但同时要求“shipment immediately”，这是对原报盘的船期“shipment within 2 months”进行了修改，因此构成了一个还盘，原报盘则被中止。2)在这个前提下，再来考虑 x 都有哪些选择以及哪个是最可能或最好的。答题切入点：1)还盘的定义； 2)报盘中止的因素；3)X 可能有的各项选择；4)X 最可能选择的做法#*及原因。Chapter 4 Terms of Commodity1 2 3 4 5 6
30、7 8 9 10I. Multiple choices C C D D B C C B D BII. True or false statements F F F T F F T F F FIII. CalculationCompany C has a contract to export 10 metric tons of Seafood, to be packed in cartons each of 40 lb. (lib =0. 45 358kg), with a 5% more or less allowed both in quantity and in amount.1. How
31、 many cartons of Seafood can Company C deliver at most?2. How many cartons of Seafood should Company C deliver at least?1 lib =0. 453 58kg, so 40 lb = 18. 144kgMaximum: 10x l 000kg x (1 +5%) /18. 144= 578.7 (Attention: 0. 7 should be deleted here) = 578 cartonsMinimum: 10 xl 000kg x (1 -5% ) /18. 14
32、4= 523.6 (Attention: 0, 6 should be added here) = 524 cartonsAnswer: 1) At most, Company C can deliver 578 cartons of Seafood.2) At least, Company C should deliver 524 cartons.IV. Explain the following terms1. quality latitudeQuality latitude means the permissible range within which the quality of t
33、he goods delivered by the seller may be flexibly controlled.2. quality toleranceQuality tolerance refers to the quality deviation recognized (e. g. by some industry), which allows the quality of the goods delivered to have certain difference within a range.3. sale by counter sampleA counter sample i
34、s a replica made by the seller of the sample provided, normally by the buyer. In a sale by counter sample, the counter sample will replace the original sample and become the final standard of quality of the transaction. By means of a counter sample, the seller would be more comfortable to prepare th
35、e mass products according to a sample provided by himself. Even in the worst scenario that the buyer later finds the counter sample does not match with the original, the seller will not carry any responsibility as the counter sample has been confirmed by the buyer.4. gross for netIn the case of “gro
36、ss for net“, the goods are priced by their gross weight instead of the net. The “gross for net“ practice will be adopted when the packing may become an indivisible part of the product, such as tobacco flakes; or the packing material is almost of the same value as that of the goods, like grain and fo
37、dder.5. standard regainStandard regain (rate) refers to the ratio between the water content and the dry weight of the goods which is accepted in the world market or agreed upon by the seller and the buyer.6. conditioned weightConditioned weight is adopted for some commodities like wool which is not
38、usually packed in a vacuum container and tends to absorb moisture, as the weight of these commodities is likely to be unstable due to the fluctuation of their actual moisture content and varies greatly from time to time, and from places to places. In addition, these products are of high value, it be
39、comes important for the buyer and seller to reach an agreement on the concept of weight.7. more or less clause“More or less clause“ refers to the stipulation constituting part of the quantity clause in the contract that allows #*the seller to deliver the goods with a certain percentage of more or le
40、ss in quantity accordingly. The use of “more or less clause“ is for the sake of efficient shipment and less complexity in contract execution because in practice it is not that easy to control the quantity of goods supplied strictly and exactly.A more or less clause usually concerns three issues: 1 )
41、 how much more or less should be allowed; 2) which party is entitled to make the decision; and 3 ) how should the more or less portion of the goods be priced.8. shipping marksShipping marks are a type of marking on the shipping packing. It quickens the identification and transportation of the goods
42、and helps avoid shipping errors. International standard shipping marks are usually made up of four parts: 1) Consignees code; 2) Destination; 3 ) Reference No. and 4) Number of packages.9. F. A. Q.F. A. Q. is the abbreviation of “fair average quality“. F. A. Q. is a kind of standard used to indicate
43、 that the quality of the product offered is about equal to the average quality level of the same crop within a certain period of time (e. g. a year. ).10. neutral packingNeutral packing is a special type of marking rather than a type of packing as its name may indicate. While neutral packing is requ
44、ired, no marking of origin or name of the manufacturer should appear on the product, on the shipping packing or sales packaging.V. Short questions1. What are the two common ways of indicating quality of goods for export?Sale by description and sale by sample are the two common ways of indicating qua
45、lity of goods for export. Sale by description is a way to specify the quality of most commodities in international trade. Sale by description may take the form of sale by specification, sale by grade, sale by standard, sale by brand name or trade mark, sale by origin and sale by descriptions or illu
46、strations.A sale is made by sample when the seller and buyer agree that samples are used as reference of quality and condition of the goods to be delivered. This method is used when it is difficult to describe quality of the commodity by words. According to the supplier of the sample, there are thre
47、e cases under sale by sample: sale by sellers sample, sale by buyers sample and sale by counter sample.2. What are the issues to be concerned when specifying quality clause in a sales contract?When stipulating a quality clause in a sales contract, the following are to be concerned: adopting the righ
48、t way to stipulate the quality: Sale by description is applicable to commodities of which quality can be expressed by some scientific indices. While sale by sample is adopted when it is difficult to describe quality of the commodity by words. avoiding double standard, either by description or by sam
49、ple: When samples are required under a sale by description, it is essential to indicate that the sample is for reference only. making use of the quality latitude which allows the seller to have flexibility in controlling the quality because absolute quality is difficult or even impossible to handle. in case of a sample provided by the buyer, making use of protecting clause.3. What are the common ways to measure the weight of export goods.?The common ways to measure the weight of export goods include gross weight, net weight, conditioned weight, th
