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NEW QUESTION 48
Where two parties are engaged in international trade and have a long term relationship and a degree of mutual trust, which payment mechanism is commonly used?

A. Letter of CreditB. Documentary CollectionC. Stage PaymentD. Bill of Exchange

Answer: B

Explanation:
Documentary collection is used in international transactions where there is trust. This is explained on p. 35 It's basically when supplier and buyer delegate collection of payments to their respective banks. They need to trust that each other will actually pay - otherwise they wouldn't delegate this. A Letter of Credit is a documentary credit confirmed by a bank, usually for export. A Bill of Ex-change is a promise to pay at a later date, usually supported by a bank. Stage payments are used in big purchases, such as construction projects where payment is given to the contractor when certain milestones are hit.

 

NEW QUESTION 49
A failure to perform a provision of a contract which does not affect the end performance of the contract is known as what?

A. major breachB. warranty breachC. small breachD. minor breach

Answer: D

Explanation:
This is a minor breach. This is the definition as given in the study guide on p. 48

 

NEW QUESTION 50
Which of the following will you put into box 1?

A. anticipatory breachB. payment termsC. specificationD. fundamental breach

Answer: A

Explanation:
The correct answers are as follows:

This is an anticipatory breach as the breach hasn't happened yet- it's about what will happen to the future summer order.

 

NEW QUESTION 51
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