TradeTerms

Trade TermsI. True or False. In the following statements you may find some are true, some false. Please mark T if the statement is true. If it is false, please mark F.1. In CIF, the seller procures the insurance and pays the insurance premium. When damage occurs during the voyage, the buyer needs to make the claim against insurance Co. when the goods arrive at the destination.2. “Free Carrier” means that the buyer delivers the goods, cleared for export, to the carrier nominated by the seller at the named place.3. “Incoterms 2010” is the latest edition, including 13 different international trade terms.4. In CIF, the seller delivers when the goods are put on board the vessel at the named port of shipment, which means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.5. Under CFR, CPT, FOB and FCA, no party has the obligation to procure insurance, so the goods will not be insured in any way.6. If the goods are to be exported to Japan from Xi’an, FCA is better than FOB.7. Price terms are mainly applied to determining the prices of commodities in international trade.8. Warsaw-Oxford Rules clearly explain the 13 kinds of trade terms in current use.9. As an exporter, you concluded a deal with an American on the basis of EXW; then your transaction risk is reduced to the minimum degree.10. Incoterms 2010 is applicable to both domestic trade and international trade.11. On CIP terms, the seller must pay the freight rate and insurance premium as well as bear all the risks until the goods have arrived at the destination.12. DAT means that the seller must deliver the goods to the buyer at the named terminal of the destination on his own charges and at his own risks.13. If you have signed a contract with a Japanese buyer on the basis of FOBST, you must be responsible for stowing and trimming the goods at your own expense.14. CFR Landed indicates that the seller must guarantee the arrival of the goods at the destination without any damage.15. The main difference between a CIF contract and a DAT contract lies in the fact that the former is a symbolic delivery of goods, whereas the latter is a physical delivery of goods.16. The common feature of an FOB contract and an FAS contract is that the seller must load the goods on board a named ship.17. According to INCOTERMS2010, FCA is suitable for all kinds of transportation.18. The buyer should note that under CIP the seller is only required to obtain insurance on a minimum coverage.19. As an importer, you concluded a deal with an American on the basis of FOBNEW YORK, and then the seller must bear the obligations to deliver the goods at the NEW TORK port.20. Term EXW should not be used when the buyer cannot carry out directly or indirectly the export formalities.21. All the D group terms are arrival contract terms and they all indicate actual delivery.22. If the buyer want to use rail transport and are willing to bear the cost of customs clearance, the buyer can use FCA trade terms.23. Since under CFR the risk will be transferred when the goods are loaded on board, the sellerwill not hold any responsibility if the buyer finds the goods not in conformity with the contracted specifications.24. Different terms of delivery mean different responsibilities of the seller and the buyer.25. The primary function of the delivery terms is to define the responsibilities to be carried out by either the seller or the buyer. In relation to the responsibilities, there are costs and expense.26. All terms starting with a “C”require the seller to bear the main costs of carriage and risk during the transport.27. Incoterms aim to provide such a set of standardized terms which mean exactly the same to both parties to a contract and which will be interpreted in exactly the same way by courts in every country. So Incoterms are the part of national or international law.28. Incoterms are the part of national or international law, so they can be binding on sellers and buyers as their contractual obligations in any case.29. For Groups C terms, risks transfer earlier either when the goods have been put on board the vessel or when the goods have been delivered to the carrier.30. Incoterms still can be binding on sellers and buyers as their contractual obligations provided the sales contract specifies that a particular Incoterms will not apply.31. Besides Incoterms, there are also other international sets of rules such as Warsaw-Oxford Rules (1932) and Revised American Foreign Trade Definitions (1941) that respectively provide standard interpretation for CIF and delivery terms which are widely used in America.32. For the purpose of easier reading and understanding, the terms in Incoterms 2010 are grouped in four basically different categories: Group E terms, Group F terms, Group C terms, and Group D terms, with decreasing responsibilities, costs, and risks for the seller and decreasing responsibilities, costs, and risks for the buyer.33. Group E has one (departure) term only, Ex Works (EXW). It is called a departure term whereby the seller makes the goods available to the buyer usually at the seller’s own premises. 34. According to the Incoterms 2010 under DAP the buyer is not responsible for unloading the goods from the arriving vehicle at the place of destination.35. The EXW term indicates an actual delivery.36. If the sales contract contains provisions contrasting to the definition of the Incoterms used, as far as the provisions are legally recognized by relevant laws and regulations, they will be valid.37. FOB is a shipment contract term, indicating actual delivery.38. FCA and CPT have one thing in common that the seller delivers when the goods are handed over to the first carrier nominated by the buyer.39. Under CIF the seller has to purchase insurance, therefore he has to bear the risk during the ocean transport.40. All the terms starting with a “D” are arrival contract terms and they all indicate actual delivery.II. Make suitable choices (some may have more than one choice)1. The primary function of the delivery terms is to define the responsibilities to be carried out by either the seller or the buyer. Such as: ( ).A. Time of deliveryC. Document and expenses B. place of deliveryD. Title to goods2. The following trade terms ( ) can be used only for sea or inland waterway transport.A. CIFB. CIPC. CFRD. FOB3. ( ) may be used irrespective of the mode of transport including multi-modal transport.A. CFR C. FCAB. CPT D. CIP4. There are altogether ( ) terms defined by the Incoterms 2010.A. 6B. 9C. 11D. 135. Which of the following trade terms can be adopted if the shipment will be made from Chengdu (Sichuan Province) to Hamburg? ( )A. CIFB. CFRC. CIPD. CPT6. Among all the Incoterms ( ) imposes the minimum obligation and cost to the seller.A. EXWB. CIFC. DAPD. DDP7. According to the Incoterms 2010 under FCA the risk of goods will be transferred from the seller to the buyer ( ).A. when the goods are placed at the disposal of the buyerB. when the goods are delivered to the named place in the exporting countryC. when the goods are given to the nominated carrierD. when the goods are loaded on the vehicle of a carrier8. Under EXW term, Seller’s Obligations are ( ).A. Provide appropriate packing and markingB. Place the goods at the disposal of the buyer at the named place of deliveryC. Carry out the export proceduresD. On request assist the buyer with the export documentation9. Under EXW term, buyer’s Obligations are ( ).A. Take delivery of the goodsB. Provide appropriate packing and markingC. Take contract for the carriage to the final destinationD. Carry out the export procedures10. Under FCA terms, Seller’s Obligations are ().A. carry out the import proceduresB. carry out the export proceduresC. contract of the carriage to the final destinationD. place the goods at the disposal of the carrier nominated by the buyer, not unloaded.11. The term FOB should be followed by ( ).A. port of shipment C. port of destinationB. point of origin D. place of shipment12. The term CFR should be followed by ( ).A. point of origin C. port of destinationB. place of shipment D. port of shipment13. Under CIF, who signs the contract of insurance with the insurance company according to Incoterms2010? ( ).A. BuyerB. SellerC. CarrierD. Carrier’s agent14. According to CPT, who signs the contract of carriage and pays the freight to the destination? ( ).A. BuyerB. SellerC. CarrierD. Carrier’s agent15. Und er FCA, if delivery occurs at the seller’s premises, who is responsible for loading the goods according to the contract of sale? ( ).A. CarrierB. SellerC. BuyerD. Carrier’s agent16. Under the trade term CFR, after the goods are put on board the vessel at the named port of shipment, the ( ) should bear all the risks of loss of or damage to the goods from that point.A. BuyerB. sellerC. consignorD. carrier17. ( ) can only be used for sea and inland waterway transport, while ( ) can be used for any mode of transport including multi-modal transport.A. CIP, CIF C. FOB, CFRB. CIP, CPT D. CFR, CPT18. Under FCA, if delivery occurs at the seller’s premise, () is responsible for loading. If delivery occurs at any other place, ( ) is not responsible for unloading.A. seller, buyer C. buyer, sellerB. seller, seller D. buyer, buyer19. Under the trade term ( ), the seller has to procure the cargo transportation insurance.A. CPTB. CIFC. FCAD. CFR20. Which of the following trade terms can be used any transport ( )？A. FASB. FOBC. CIPD. CPT21. If an exporter intends to export to America from Lanzhou, ( ) is better than ( ).A. FOB…CFRB. CFR…FOBC. CFR…CPTD. CPT…CFR22. According to Incoterms 2010, which group of the following trade terms means that the seller must contract for the carriage of the goods to the named place of destination? ( )A. CIF and FCA C. CFR and CIFB. CIF and CIP D. CPT and CIP23. Under the FOB term, all costs and risks of loss of or damage to the goods are transferred from the seller to the buyer when the goods are put on board the vessel at the named ( ).A. port of discharge C. port of deliveryB. port of destination D. port of shipment24. Under the CFR term, the seller must, in addition, pay the cost of carriage necessary to bring the goods to the ( ), when he delivers the goods to the carrier nominated by him.A. named placeC. named port of destination B. any placeD. named destination25. ( ) represents the minimum obligation for the seller.A. EXWB. FOBC. DAPD. DDP26. Under EXW term, ( ) bears all costs and risks involved in taking the goods from the seller’s premises to the desired destination. This term thus represents the minimum obligation for the seller.A. the sellerB. the buyerC. carrierD. consignor27. According to the Incoterms 2010 under CIF if the goods get loose from the hook and fall into the sea during the loading stage, ( ) should hold liable for the loss.A. the buyer C. the carrierB. the sellerD. both the seller and buyer28. Under FOB contract, the ( ) is to arrange insurance.A. sellerB. insurerC. buyerD. carrier29. When the seller contracts for insurance, it is a(n) ( ) contract.A. CFRB. FCAC. FASD. CIF30. In international export practice, in case we conclude a FOB or CFR contract with the buyer abroad, unless otherwise agreed, we must give the buyer notice that the goods have been delivered on board the vessel, so as to enable him to ( ) in time.A. arrange shipment C. cover insuranceB. take delivery D. open L/C31. The CIF contract is a typical “document transaction” or “()”.A. dependent transaction C. physical deliveryB. symbolic delivery D. arrival contract32. According to the different ways of delivery, terms of trade can be divided into ( ) and the actual delivery.A. symbolic delivery C. delivery by sampleB. delivery at port of shipment D. delivery at destination port33. ( ) has one (departure) term only, It is called a departure term whereby the seller makes the goods available to the buyer usually at the seller’s own premises.A. Group EB. Group FC. Group CD. Group D34. In international export practice, in case we conclude a FOB or CFR contract with the buyer abroad, if we fail to give the buyer notice that the goods have been delivered on board the vessel in time, so ( ) bear the losses when the goods counter risk in transit.A. the buyer C. the sellerB. the insurance company D. the carrier35. Under FCA terms, ( ) cleared for exports.A. the seller C. the buyerB. the insurance company D. the carrier36. Under Incoterms 2010 CFR term, title to goods will be transferred from the seller to the buyer when ( ).A. the goods are put on board the vessel on the named port of shipment.B. the goods are put on board the vessel on the named port of destination.C. the goods pass the ship’s rail at the named port of shipment.D. the goods pass the ship’s rail at the named po rt of destination.37. FOB under tackle: ( ) fulfils his obligation of loading the goods on board.A. the seller C. the buyerB. the shipping company D. the carrier38. FOB liner terms: ( ) bears the loading cost.A. the seller C. the buyerB. the shipping company D. the carrier39. CFR/CIF Landed: The goods must be unloading onto the dock and the unloading costs will be beard by ( ).A. the seller C. the buyerB. the shipping company D. the carrier40. CFR/CIF Liner Terms, ( ) is responsible for the unloading of goods since he is responsible for contracting and paying for carriage.A. the seller C. the buyerB. the shipping company D. the carrier。