Advanced Diploma in Documentary Credits (ADDC)

The Sales Contract

1 Quiz

The Sales Contract – Quiz

Types of Documents

1 Quiz

Types of Documents – Quiz

1 Quiz

Incoterms 2020 – Quiz

Payment Methods

4 Topics | 1 Quiz

Advance Payment

Documentary Collections

Documentary Credits

Payment Methods – Quiz

Risks in International Trade

1 Quiz

Risks in International Trade – Quiz

Issuance of Documentary Credits

2 Topics | 1 Quiz

Pre Considerations

Issuance of Documentary Credits – Quiz

Undertaking of the Banks

1 Quiz

Undertaking of the Banks – Quiz

Advising and Confirmation

1 Quiz

Advising and Confirmation – Quiz

1 Quiz

Amendments – Quiz

Presentation, Examination and Notice of Refusal

1 Quiz

Presentation, Examination and Notice of Refusal – Quiz

Understanding SWIFT MT700

1 Quiz

Understanding SWIFT MT700 – Quiz

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The Sales Contract – Quiz

Advanced Diploma in Documentary Credits (ADDC) The Sales Contract The Sales Contract – Quiz

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Question 1 of 10

1. Question
Which of the following statements regarding a sales contract is/are correct?
I. The primary purpose of a sales contract is to record the seller’s agreement to supply the goods and the buyer’s agreement to pay the agreed price.
II. Every agreement between parties is a legally enforceable contract.
III. An agreement for the sale and purchase of prohibited drugs is not a contract because it is not legally enforceable.
IV. In many legal jurisdictions, a sales contract need not be in writing to be legally enforceable, although parties generally prefer to reduce it to writing.
- A. I and II only
- B. I, III and IV only
- C. II and III only
- D. I, II, III and IV
Correct

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Question 2 of 10

2. Question
Why do parties to an international sales transaction generally prefer to execute a formal written sales contract signed by both parties?
- A. Because a sales contract is legally enforceable only if it is in writing.
- B. Because it provides clarity on the agreed terms and serves as evidence in the event of disputes.
- C. Because banks will not issue a documentary credit unless a written contract is produced.
- D. Because a proforma invoice and a purchase order are not recognised as substitutes for a formal sales contract.
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Question 3 of 10

3. Question
Which of the following is NOT an essential feature of a sales contract for the international sale of goods?
- A. Description of the goods, quantity and price.
- B. Shipment terms, payment terms and documents required.
- C. Force majeure, governing law and dispute resolution.
- D. Reimbursement authorization, reimbursement undertaking and reimbursement claim procedure.
Correct

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Question 4 of 10

4. Question
Which of the following best describes a complete price clause in an international sales contract?
- A. Unit price together with the currency, applicable Incoterms rule, named place of delivery and the source of the Incoterms.
- B. Unit price together with the quantity only.
- C. Unit price together with the payment method only.
- D. Unit price together with the latest shipment date only.
Correct

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Question 5 of 10

5. Question
Which of the following are commonly used methods of payment in international trade?
- A. Advance Payment, Open Account, Documentary Collection and Documentary Credit.
- B. Demand Drafts, Banker's Cheques, Credit Cards and Promissory Notes.
- C. Both A and B.
- D. None of the above.
Correct

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Question 6 of 10

6. Question
Which of the following represents payment terms commonly agreed in an international sales contract?
- A. Sight Payment, Deferred Payment and Acceptance of a Bill of Exchange.
- B. Advance Payment, Open Account, Documentary Collection and Documentary Credit.
- C. Both A and B represent payment terms.
- D. Both A and B represent payment methods.
Correct

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Question 7 of 10

7. Question
A sales contract involves the international movement of goods and provides for payment at sight. Which categories of documents would normally be required?
- A. Financial Documents
- B. Commercial Documents
- C. Official Documents
- D. Both B and C
Correct

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Question 8 of 10

8. Question
A well-structured international sales contract should include:
- A. Conditions relating to the performance of the contractual obligations.
- B. Conditions dealing with non-performance of the contractual obligations.
- C. Both A and B.
- D. Either A or B.
Correct

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Question 9 of 10

9. Question
A seller is unable to ship the contracted goods because the export port has been closed due to war. Which provision in the sales contract protects the parties in such circumstances?
- A. Penalty clause
- B. Force majeure clause
- C. Governing law clause
- D. Jurisdiction clause
Correct

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Question 10 of 10

10. Question
A dispute arises between the buyer and the seller regarding their respective contractual obligations. Which of the following provisions of the sales contract would assist the parties in resolving the dispute?
- A. Arbitration clause.
- B. Legal jurisdiction.
- C. Governing law.
- D. All of the above.
Correct

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