International Sales Contracts Exam

Posted on May 8, 2024 in Law & Jurisprudence

This exam consists of two parts and focuses on international sales contracts. Please use a blue or black pen to answer all questions. Answers written in pencil will not be graded.

Part 1: Short Answer Questions

Question 1 (1.5 points)

Explain the purpose and scope of application of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

**Answer:**

The CISG aims to provide a uniform legal framework for international trade by establishing consistent rules governing the formation of contracts and the rights and obligations of buyers and sellers. It applies to contracts for the sale of goods between parties whose places of business are in different countries that have ratified the Convention.

Question 2 (1.5 points)

Outline the seller’s obligations in an international sales contract under the CISG.

**Answer:**

  • Deliver the goods, along with relevant documents, and transfer ownership as per the contract and the CISG.
  • If responsible for carriage, arrange transportation to the agreed-upon location under standard terms.
  • Deliver the goods on the specified date.
  • Ensure the goods match the agreed-upon quantity, quality, description, and packaging.
  • Deliver goods free from any third-party claims related to industrial or intellectual property rights.

Question 3

Define “Force Majeure” and provide examples of situations that qualify as Force Majeure events.

**Answer:**

Force Majeure refers to unforeseeable circumstances beyond a party’s control that prevent them from fulfilling their contractual obligations. Examples include natural disasters (earthquakes, floods), epidemics, war, or government actions.

Question 4 (1.5 points)

Decathlon, a sporting goods retailer, wants to expand into the Chinese market for the long term and requires expertise in the local market. Which international business figure would you recommend for Decathlon and why?

**Answer:**

An agent would be the most suitable option for Decathlon. An agent is a local individual or company that promotes and facilitates business operations on behalf of a principal (Decathlon) in a foreign market. They possess the necessary market knowledge, connections, and cultural understanding to effectively represent Decathlon’s interests in China.

Question 5

List the essential elements that should be included in an international sales contract.

**Answer:**

  • Description of goods
  • Contract price
  • Delivery terms
  • Time of delivery
  • Payment conditions
  • Required documents

Part 2: Multiple Choice Questions

Question 1

What are the possible ways to resolve disputes arising from an international sales contract?

  1. Court
  2. International Arbitration
  3. Both

Question 2

What is the term for the provision that allows parties to modify or deviate from the CISG’s provisions?

  1. Party autonomy
  2. Contractual freedom
  3. Force majeure

Question 3

What type of contract is typically used in international trade?

  1. Unilateral
  2. Bilateral
  3. Legally bound

Question 4

Identify the international business figure described below:
– Local company with its own business, independent from the principal
– Does not bear any risk
– Long-term relationship with the principal
– Not the owner of the goods

  1. Distributor
  2. Agent
  3. Commercial Representative

Question 5

Who holds the patent and trademark rights to produce and distribute a company’s goods in a foreign country?

  1. Licensee
  2. Franchisee (Only distribution)
  3. Distributor

Question 6

Lacturale, a Spanish dairy company, wants to sell milk to New Zealand due to a temporary shortage caused by a disease outbreak. Which international figure would be most appropriate for this single transaction?

  1. Agent
  2. Mediator
  3. Franchisee

Question 7

Which of the following are essential elements of a valid contract?

  1. Capacity to contract, friendly purpose, legal form
  2. Capacity to contract, lawful purpose, legal form, absence of consent
  3. Capacity to contract, lawful purpose, legal form, consent

Question 8

What are some disadvantages of using an agent in international trade?

  1. Loss of control over transactions
  2. Supplier has no control over pricing or agent’s activities
  3. Agent may lack cultural understanding and local business knowledge

Question 9

What type of issues do “Goods received are not the ones agreed” and “Failure to take delivery” represent?

  1. Obligations of the buyer
  2. Causes of breach of contract
  3. Key clauses

Question 10

What are the general obligations of the buyer in an international sales contract?

  1. Pay the price and take delivery of the goods
  2. Transfer ownership as per the contract and the CISG
  3. Reduce the price in the counteroffer