chap 3

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

56.

57.

58.

59.

60.

61.

62.

63.

64.

b. Pre-delivery inspection
c. Post-delivery inspection
d. Customs inspection
Inspection by the buyer is called:
a. Independent inspection
b. Inspection of goods prior to shipment
c. Open package inspection
d. Customs inspection
The defects liability period is also called:
a. Warranty period
b. Guarantee period

c. Correction action period
d. Legal action period
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
Which of the following examples is a latent defect?
a. Missing parts
b. Structural weaknesses
c. Wrong items
d. Broken items
The answers to the questions of implied warranties are supplied by:
a. The contract provisions
b. The UCC
c. Most laws
d. The contract
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
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
Which of these counts as a defect?
a. Defective design

b. Fair wear and tear
c. Misuse
d. Missing items
Which of these does not count as a defect?
a. Defective design
b. Misuse
c. Defective materials


65.

66.

67.

68.

69.

70.

71.

72.

73.

d. Defective workmanship
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
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
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
____________ manufacturer(s) produce(s) perfect products all the time.
a. All
b. Few
c. No
d. Many
Which of these requires prior inspection by SGS?
a. Indonesia
b. Malaysia
c. Thailand
d. Vietnam
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
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
__________ refer(s) to the questions of implied warranties.
a. Most contracts
b. Most laws
c. The UCC
d. The Vienna Sales Convention
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.
b.
c.
d.

Reputation
Production
Resolution
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
d. Chinaware
95. “The Buyer shall notify the Seller of defects without undue delay”. This is an example of:
a. Defects liability period
b. Notification period
c. Rectification period
d. Legal action period
96. “The Seller shall make good the defect or damage as soon as practicable and at his own cost”.
This is an example of:
a. Legal action period
b. Notification period
c. Rectification period
d. Defect liability period
97. Who usually has to pay for curing defects?

a. The buyer
b. The seller
c. Both the buyer and the seller
d. The manufacturer
98. According to the UCC, how long is the legal action period?
a. Two years
b. Three years
c. Four years
d. One year
99. “Nuts and bolts are inadequately tightened” represents:
a. Defective materials
b. Defective design
c. Defective workmanship
d. Misuse
100.
“A machine that consumes more fuel than specifications” is an example of
a. Latent defect
b. Patent defect
c. Inherent defect
d. Apparent defect
1. B

11.B

21.B

31.B

41.C

51.C

61.B

71.C

81.A

91.A


2.C

12.A

22.D

32.B

42.B

52.B

62.C

72.B

82.B

92.C

3.B

13.B

23.B

33.C

43.A

53.B

63.A

73.B

83.C

93.C

4.D

14.C

24.C

34.A

44.C

54.C

64.B

74.C

84.B

94.A

5.A

15.D

25.C

35.C

45.D

55.B

65.A

75.C

85.A

95.B

6.C

16.B

26.D

36.B

46.A

56.C

66.C

76.A

86.B

96.C

7.A

17.B

27.D

37.D

47.C

57.A

67.B

77.B

87.C

97.B

8.C

18.C

28.A

38.D

48.A

58.A

68.C

78.C

88.C

98.C

9.D

19.D

29.D

39.B

49.B

59.B

69.A

79.A

89.B

99.C

10.D

20.A

30.D

40.D

50.B

60.C

70.C

80.C

90.B

100.A