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Chapter 2 International Trade Terms
1
2
3
4
5
6
7
8
9
10
I. Multiple choices
B
C
A
C
C
D
A
B
C
D
II. True or false statements
T
T
F
F
T
F
F
F
F
T
III. Explain the following terms
1. shipment contract
Shipment contract is a contract using an Incoterm which indicates that the delivery happens at the time or before the time of shipment.
2. symbolic delivery
Symbolic 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 contract
Arrival contract means a contract using an Incoterm which indicates that the delivery happens when the goods arrive at the destination.
4. actual delivery
Actual delivery refers to a delivery situation in which when the seller delivers the buyer does physically receive the goods.
IV. Short questions
1. Who pays 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 seller's risk will be transferred to the buyer when the goods are loaded on board, b. The seller is responsible for export customs formalities 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 requires 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 buyer's risk.
4. What are the two types of trade terms concerning the transfer of risks?
Shipment contract terms vs. arrival contract terms. Under shipment contract terms the seller's risk will be transferred to the buyer before the goods depart from the place/port of shipment. Under arrival contrac
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