chap 3

concealed defects 13.The final quality hurdle is the _______________ during which the exporter is liable to cure defects that come to light in the goods.. but 15.If the buyer can make ce

mChapter 3 Multiple choice questions

1. In order to produce perfect products, manufacturers need to have

a product insurance

b quality assurance programs

c customer satisfaction

d defect liability period

2. Quality assurance and customer satisfaction are the same issues for customers _

a in domestic market

b in overseas markets

c both a and b

d neither a nor b

3. Negotiation of specifications between the exporter and the importer can be

a an effortless process

b a difficult process

c done by an intermediary

d a simple process

4. In negotiating specifications, conflicts can arise _

a within the importer’s own team

b between the importer and the exporter

c within the exporter’s own team

d all of the above

5. What can protect both the exporter and the importer in an export contract?

a A well-designed set of specifications

b An itemized set of specifications

c A plain set of specifications

d None of these

6. What kind of inspection is particularly important for sophisticated items or capital goods?

a Customs inspection

b Carrier’s inspection

c Pre-delivery inspection

d SGS’s inspection

7. When the goods arrive, if they are , the importer can reject them but if they _ specifications, he is obliged to accept them

a defective/conform to

b perfect/conform to

c defective/differ from

d perfect/differ from

8. Which countries require that all goods imported to their countries are inspected by the SGS immediately before shipment?

a The USA

b Vietnam

c Indonesia

d The UK

9. Inspection by reveals discrepancies in quality

a customs officers

b the carrier

c the exporter

d the importer

10.Inspection by the _ is call “open package inspection”

a customs officers

b the carrier

c the exporter

d the importer

11.Defects that come to light after buyer’s acceptance are called _

a patent defects

b latent defects

c inherent defects

d apparent defects

12.Defects such as wrong items, broken or missing parts, scratches, and so on are called

a patent defects

b latent defects

c inherent defects

d concealed defects

13.The final quality hurdle is the _ during which the exporter is liable to cure defects that come to light in the goods

a guarantee period

b defect liability period

c correction methods

d quality assurance requirements

14.In some legal systems, the buyer has the right _ duty to inspect delivered goods

a and

b or

c and/or

d but

15.If the buyer can make certain assumptions about goods – even if the exporter gives no express warranty, these assumptions are called _

a explicit warranties

b exotic warranties

c unspoken warranties

d implied warranties

16.How many types of implied warranties are there?

a two

b three

c four

d five

17.In principle the buyer can reject delivered goods if they do not conform to the contract This is called

a Implied Warranty of suitability

b Implied warranty of conformity

c Implied warranty of merchantability

d Implied warranty of fitness for intended purpose

18.The buyer can reject goods that are not of saleable quality This is called

a Implied Warranty of suitability

b Implied warranty of conformity

c Implied warranty of merchantability

d Implied warranty of fitness for intended purpose

19.If the exporter knew the buyer’s intended purpose; and if the buyer relied on the exporter’s knowledge and expertise, the buyer can reject goods that are not suitable for their intended purpose This is called

a Implied Warranty of suitability with intended purpose

b Implied warranty of fitness for intention

c Implied warranty of fitness for objective

d Implied warranty of fitness for intended purpose

20.Different legal systems regulate that rejection of delivered goods must be total can

be partial

a or

b and

c and/or

d nor

21.The exporter’s right to “cure” any defects in his delivery is _

a out of question

b advantageous to him

c disadvantageous to him

d detrimental to him

22.According to the UCC, if the goods fail in any respect to conform to the contract, the buyer may

a reject the whole

b accept the whole

c accept any commercial unit and reject the rest

d All the above

23.Another name for warranty is

a guarantee

b defect liability

c legal responsibility

d warrantee

24.There are _ parties to a warranty and _ in a guarantee

a three/two

b three/three

c two/three

d two/two

25.The guarantor is usually a

a bank

b insurance company

c both a and b

d neither a nor b

26.To avoid confusion, many contract drafters use “ _” instead of “warranty”

a guarantee

b warrantee

c legal responsibility

d defect liability

27.The warrantor is always a

a bank

b insurance company

c both a and b

d neither a nor b

28.Most contracts contain an assurance that the exporter will any defects in his products

a make good

b take away

c alter

d modify

29.A warranty protects

a the exporter

b the importer

c neither the exporter nor the importer

d both the exporter and the importer

30.Defects include:

a mistake

b misuse

c fair wear and tear

d workmanship

31.Defects include:

a mistake

b materials

c fair wear and tear

d misuse

32.It is to identify latent defect than patent defect

a easier

b more complicated

c more effective

d better

33.“A radio lacks the wires connecting the loudspeaker to the amplifier” is an example of:

a Defective design

b Defective materials

c Defective workmanship

d Misuse by the buyer

34.“A voltmeter that is specified as accurate within 1 millivolt is accurate within only 5 millivolt” is

an example of:

a Defective design

b Defective materials

c Defective workmanship

d Misuse by the seller

35.The defects liability clause should state:

a the date of acceptance

b exporter’s duty if a defect comes to light

c both a and b

d only ‘a’

36.The Disclaimer of warranty means:

a the seller is liable for the goods

b the buyer is denied of some of his normal rights

c the seller will make good any defect

d contract prices would be far higher

37.Disclaimer of warranty often accompanies:

a Contracts for hardware

b Contracts for footwear

c Contracts for glassware

d Contracts for software

38.How many timing problems are there in the defects liability period?

a one

b two

c three

d four

39.For the exporter, the option to repair a defective item abroad _

a is negligent

b can be costly

c is always the best choice

d is always the worst choice

40.Allowing the buyer to repair the equipment at the exporter’s cost

a is always the best choice for the exporter

b is always the worst choice for the exporter

c is often safe for the exporter

d is often unsafe for the exporter

41.“Repair by the buyer” provision is often .

a welcomed by the seller

b beneficial to the seller

c avoided by the seller

d imposed by the buyer

42.Exporters prefer:

a the return of the defective item to the replacement of it

b the replacement of the defective item to the return of it

c the return of the goods and refund of the price

d none of these

43.Replacing a defective product helps to keep the _of the customer

a goodwill

b good image

c good business

d wellbeing

44.With defective heavy equipment, it is usually the case that:

a the whole product is replaced

b the whole product is returned

c just a defective part is replaced

d just a defective part is returned

45.To cure the defective goods, the best option for the exporter is:

a Taking back the defective goods and giving back the money

b reducing the price

c replacing the goods

d dependent on the type of goods

46.Returned shipment to the exporter’s country means:

a the deal is a total loss for the exporter

b the exporter takes back the whole shipment

c the exporter makes a small profit

d the deal is a total loss for the importer

47.A liquidated damages clause protects _

a the exporter rather than the importer

b the importer rather than the exporter

c both sides

d neither the exporter nor the importer

48.The “exporter’s wording” and the “buyer’s wording” in the defects liability provision represent:

a A major contract issue

b A minor contract issue

c nonsense

d profit and loss of each party

49.Who usually pays for curing defects?

a The importer

b The exporter

c Both parties

d A third party

50.As the consequences of a defect can be expensive, the question of who pays for the

consequential loss or damage is often

a agreeable

b controversial

c nonnegotiable

d amicable

51.Which of the following is the objective aimed at by the exporter to minimize the risk of the goods being rejected or of heavy defects liability claims?

a Winning buyer’s goodwill

b Keeping his promise

c Negotiating detailed specifications

d Making profit

52.All of the following are objectives that the exporter tries to achieve to minimize the risk of the goods being rejected or of heavy defects liability claims EXCEPT:

a The quality specified

b The confidence in the buyer

c On-time delivery

53.Which of the following is essential to successful business?

a Quality

b Customer satisfaction

c Correct marking and packaging

d On-time delivery

54.A well-designed set of specifications protects:

a The exporter

b The importer

c Both parties

d Neither of these

55.Inspection of the goods by the buyer in the manufacturer’s factory is referred to as:

a Inspection by inspection service

b Pre-delivery inspection

c Post-delivery inspection

d Customs inspection

56.Inspection by the buyer is called:

a Independent inspection

b Inspection of goods prior to shipment

c Open package inspection

d Customs inspection

57.The defects liability period is also called:

a Warranty period

b Guarantee period

c Correction action period

d Legal action period

58.Which of the following examples is a patent defect?

a Crushed or stained garments

b The flooring shows signs of deterioration

c High fuel consumption

d Inadequately tightened nuts and bolts

59.Which of the following examples is a latent defect?

a Missing parts

b Structural weaknesses

c Wrong items

d Broken items

60.The answers to the questions of implied warranties are supplied by:

a The contract provisions

b The UCC

c Most laws

d The contract

61.Which of these allow(s) rejection of only defective or non-conforming goods?

a English law

b German law and the Vienna Sales Convention

c The UCC

d Vietnamese contract law

62.Which of the following concepts is best used to avoid confusion when we mean an assurance that the exporter will make good defects in his goods?

a Warranty

b Guarantee

c Defects liability

d Warrantee

63.Which of these counts as a defect?

a Defective design

b Fair wear and tear

c Misuse

d Missing items

64.Which of these does not count as a defect?

a Defective design

b Misuse

c Defective materials

d Defective workmanship

65.Which of these is rarely regulated by contracts?

a The legal action period

b The length of the defects liability period

c The notification period

d The rectification period

66.Which of the following is left to the applicable law to regulate?

a The notification period

b The rectification period

c The legal action period

d The length of the defect liability period

67.The legal action period varies greatly from law to law Which of these defines this period that is equal to and concurrent with the defects liability period?

a The UCC

b The BGB

c Continental law

d English law

68. manufacturer(s) produce(s) perfect products all the time

a All

b Few

c No

d Many

69.Which of these requires prior inspection by SGS?

a Indonesia

b Malaysia

c Thailand

d Vietnam

70.Which of these does not require prior inspection by SGS?

a The Philippines

b Indonesia

c The United Kingdom

d All a, b and c

71.Under most laws, a buyer can make certain assumptions about goods These assumptions are called (by lawyers):

a Express warranties

b Negotiable warranties

c Implied warranties

d Implied guarantee

72. refer(s) to the questions of implied warranties

a Most contracts

b Most laws

c The UCC

d The Vienna Sales Convention

73.The question of warranty is disposive This means:

a It is fixed

b The exporter can usually exclude all warranties

c The exporter must include it in the contract

d It is non-existent

74.Defects may be which of the following?

a Defects in materials

b Defects in workmanship

c Both

d None of these

75.Which of the following is the least desirable option for the exporter?

a Allow the buyer to repair at the exporter’s cost

b Reduce the price

c Return the goods and refund the price

d Replace the defective items

76.Which of these is the cheapest option for the exporter?

a Repair

b Replace (part or whole item)

c Reduce the price

d Return the goods

77 The fact that manufacturer often tempted to be over-optimistic and to agree to impossible specifications is in business.

a lucrative

b risky

c advantageous

d. common

78 A well-designed set of specifications protects buyer against products.

a advanced

b. dented

c. inferior

d. superior

79 With a well-designed set of specifications, the seller can protect its and

avoid costs.

a Reputation

b Production

c Resolution

d profitability

80 Independent inspection reports on

a the weight of the goods

b the size of the goods

c. Both a and b

d. None of these

81 Open package inspection is synonymous with:

a. Buyer’s inspection

b Independent inspection

c Customs inspection

d Pre-delivery inspection

82 A promise by the exporter to cure defects in his product is called:

a A product guarantee

b A product warranty

c A product insurance

d A product certification

83.A guarantee is aimed at:

a. High quality products

b Enhancing product value

c Good conduct or honesty of a person

d Making profit

84.A warranty is aimed at:

a Obtaining loans

b Assurance of product performance

c Credit purchase

d Profit making

85 An endlessly renewed liability for defects is called:

a Eternal warranty

b Ephemeral warranty

c External warranty

d Explicit warranty

86 How many timing problems are involved in Defects Liability Period?

a Three

b Four

c Two

d Five

87 The period during which the buyer can begin a legal action is legally called:

a. Notification period

b. Rectification period

c. Legal action period

d. Defect liability period

88 Which corrective method is least favourable for the seller?

a Replace the wrong items

b Reduce the price

c Return the goods and refund the price

d Repair the goods

89.The goods became deteriorated as a result of normal use This process is called:

a Fair play

b Fair wear and tear

c Faults not present on delivery

d Farewell

90.A guarantee is:

a Unilateral

b Tripartite

c Bilateral

d Multilateral

91.Inspection by carrier on dispatch is often carried out:

a In seller’s country

b In buyer’s country

c At sea

d At customs area

92.In a guarantee, a guarantor is often:

a The buyer

b The seller

c The bank

d The manufacturer

93.Failure to meet specifications is a:

a Defect in workmanship

b Defect in material

c Defect in design

d Defect in quantity

94.A disclaimer of Warranty often accompanies delivery of:

a Software

b Hardware

c Footwear