REVISION FOR A FINAL ACHIVEMENT TEST

Part 1 Concept review

- Based on the given review questions: 02/03 questions

Part 2 Concept development

Form 1. Open questions
E.g: What is the kind of letter of credit which sponsors an exporter?
=> Answer: Red clause L/C
Form 2. Reading comprehension
E.g: Read an Invoice/ contract clause/L/C… and answer the questions
Form 3. Read an extract of a contract/L/C and complete the Bill of exchange.

Part 3 Case study

Form 1: Read the cases and answer the questions: about the rules used in Incoterms, payment by L/C
Form 2: Drafting some clauses in a sale contract

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REVIEW QUESTIONS
Incoterms 2020
1. What are the purpose and scope of Incoterms 2020?
2. What are some common misconceptions about Incoterms? When choosing a rule in Incoterms 2020,
which issues should be considered by contracting parties? (p.8)
3. Point out the similarities and differences in seller’s and buyer’s obligations in CIF and CIP rules under
Incoterms 2020. (In terms of means of transportation, risk transfer, contracting for carriage, main carriage,
loading and unloading costs)
4. Point out the similarities and differences in seller’s and buyer’s obligations in FOB and FCA rules under
Incoterms 2020. (In terms of means of transportation, risk transfer, contracting for carriage, main carriage,
loading and unloading costs)
5. Point out the similarities and differences in seller’s and buyer’s obligations in DPU and DDP rules under
Incoterms 2020. (In terms of means of transportation, risk transfer, contracting for carriage, main carriage,
loading and unloading costs)
Shipping documents
6. What is a commercial invoice? Subject to UCP 600, what provisions are required for a commercial
invoice? (In terms of means of transportation, risk transfer, contracting for carriage, main carriage, loading
and unloading costs). (P.96)
7. What is a certificate of origin (C/O)? What is the significance of C/O?
8. What is a Bill of Lading? What are the functions of a Bill of Lading?
9. What is “ To order Bill of Lading”? What is a “Clean and claused Bill of Lading”?
10. What is an Airway Bill? What is the importance of an Airway Bill?

International payment
11. What is a Bill of Exchange? What are the features of Bill of exchange?
12. What is payment by open account? What are the risks for the exporter if he accepts payment by open
account?
13. What is payment by collection? Present the procedures of payment by clean collection.
14. Present the procedures of payment by documentary collection.
15. What is payment by documentary credit? Why is it said that this method can guarantee the rights of
sellers and buyers against documents?
International Contracts
16. What are the main contents of contracts under Article 402 Civil Law 2005? (p.26)
17. What are conditions for an international sale of goods contract to be valid?
18. How many types of arbitration are there? When a dispute is settled by ad hoc arbitration, what must the
parties state in their contract? (P.54)
19. What are the advantages of settlement by arbitration in comparison with litigation?
20. What is “penalty” defined by Article 300 in Vietnamese Commercial Law?

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PRACTICES FOR FINAL EXAMINATION
Part 1 CONCEPT REVIEW
1. Point out the similarities and differences in seller’s and buyer’s obligations in FOB and FCA rules under
Incoterms 2020. (In terms of means of transportation, risk transfer, contracting for carriage, main carriage,
loading and unloading costs)
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Part 2. Concept development
1. Specify the kind of letter of credit which sponsors an exporter.
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2. Specify the kind of letter of credit of which the value can be transfered to a third party.
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3. Which kind of Bill of Lading indicates that the transportation course covers several modes of transport
from the place of starting to the place of destination.
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4. If a Vietnamese seller exports his goods to China, which form of C/O is he required to obtain?
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5. What are conditions for an international sale of goods contract to be valid?
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6. What are the advantages of settlement of dispute by arbitration over litigation?
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7. What does FCL in forwarding mean and when is it used?
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8. What does LCL in forwarding mean and when is it used?
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Part 3 Case study
Case 1. Read the terms and conditions of a contract and answer the questions
The Quantity and Delivery terms under the sale of Robusta coffee contract between Vietnamese seller and
Portuguese buyer are mentioned as follows:
‘Quantity: 50kg net bag. Total weight 20 MT, net shipping weight, 0.8% franchising
Delivery: CIF Victoria port, HongKong.
1. What does that means by 0.8% franchising?
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2. Under this clause, does the Vietnamese seller bear all risks and costs until the goods are delivered at
Victoria port?
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Case 2. Read the extract of a sale contract and answer the questions:

SALE CONTRACT
Seller:XXXX
Buyer: XXXX.

The seller and the buyer hereby agrees to buy and sell the goods under the following terms and conditions.
1. Commodity, specifications, packing and price

In words: US Dollart twenty thousand two hundred and ninety only.

2. Quantity: More or less 10% is acceptable on quantity and amount.
3. Delivery time: 45-60 days after getting the deposit.
- Port of Loading: Hochiminh port, Vietnam
- Partial shipment: allowed
- Transshipment: allowed
4. Payment: TT; 50% Deposit and the rest of 50% after shipment.
- Beneficiary:

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Bank name: Vietcombank (28 Phan Dinh Phung Street, Phu Nhuan District, HCM city, Vietnam.; Swift:
VICBVNVX; Account: 23451543
- A/C Holder: Vietnam Connection Co., Ltd

Questions:
1. What is the tolerance for the quantity shipped?
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2. Who is paid under this contract?
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3. What is the term of delivery under Incoterms?
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4. Under this contract, are the goods containerized?
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5. What are the risks for the seller if the goods are sold in accordance with aforementioned delivery term?
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6. How is payment made?
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7. What risk may the seller bear?
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Case 3. Read the payment term in a sales contract below and answer the questions
‘Payment terms: By 100% irrevocable L/C at sight in favor of the seller, L/C to be opened within 07
working days after the signatures of this sale contract.
Shipping documents required:
(1) Commercial invoice in 03 originals 3 copies
(2) 3/3 full set of original clean shipped on board ocean Bills of lading made out to order of an opening
bank, marked ‘freight prepaid’
(3) weight and quality certificate in 01 original and 02 copies, issued any international independence
surveyor in Vietnam.
(4) Cargo receipt at Pusan port provided by the Buyer
(5) Certificate of origin issued by at chamber of commerce and Industry in Vietnam in 01 orginal and 02
copies
(6) Packing list issued by the seller in 03 originals and 03 copies’

1. What kind of L/C is required to be opened?

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2. When must the L/C be issued?
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3. If the seller presents a “Received for shipment Bill of Lading”, can he get money from the bank?
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4. What is the destination of the shipment?
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5. Can the issuing bank accept the quality certificate made and signed by the seller? Explain
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6. Identify any risks arising from the above payment term the Vietnamese seller may bear.
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Case 5.
Write down the appropriate rule under Incoterms 2020 used in the following transactions scenario.
- Exporter: Manila, Phillipine
- Importer: HCM, Vietnam
- Commodity: Urea fertilizer.
- Quantity: 15MT

- Seller’s responsibility: Deliver the goods to the first carrier named by the buyer in a container yard at
Cebu , Manila and make export clearance.
- Buyer’s responsibility: all remaining duties and obligations.
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Case 6 Read an extract of the contract below and answer the questions

1. Commodity: UREA fertilizer, Origin: Indonesia

2. Specification: Nitrogen: 46% min; Moisture: 0.5% max….
3. Packing: 50 kg net in Polypropylen woven bag with polythylene inner liner; 2% of total bags as empty
spare bags to be supplied free of charge.
4. Quantity: 100 MT (plus or minus 10% at seller's option)
5. Unit price: USD 400/ MT CIF Hochiminh City Port, Vietnam
6. Total amount: USD 40,000.00 (+/- 10% at seller's option)
Say: US Dollars forty thousand.
7. Shipment:
Time of shipment: not later than September 2021
Port of loading: Indonesia main ports, Indonesia
Destination port: Khanh Hoi Port, HCM city, Vietnam
Partial shipment: Allowed; Transshipment: prohibited
Notice of shipment: Within 2 days after the sailing date of carrying vessel to S.R Vietnam, the Seller shall
notify by cable to the Buyer the following information: L/C number, Amount, Name and nationality of the
vessel, Bill of Lading number/ date….
8. Payment: By irrevocable Letter of Credit at 30 sight for the full amount of the contract value, available
for the Seller’s draft, drawn on the Issuing bank, in favor of ABC Co. Ltd.
- L/C advising Bank: Jakarta Bank – Indonesia
- Bank of Issuing L/C: Agribank, Hochiminh City, Vietnam
…..
Shipping documents:
Payment shall be made upon receipt of the following documents within 30 days from the date of shipment
- 3/3 of clean on board Bill of Lading marked “Freight prepaid”
- Signed Commercial Invoice in triplicate
- Certificate of Origin issued by Indonesian Chamber of Commerce in duplicate

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- Vinacontrol inspection certificate in duplicate

1. Suppose at the shipment time, the market price of the goods go up and the seller decides to deliver only
90MT. If the seller is right in this case and why?
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3. What kind of L/C is it?
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4. What is the means of transportation used?
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5. If the seller presents a Bill of lading “Freight to collect”, could he get payment from the bank? Why or
why not?
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6. Who is the beneficiary of this contract?
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7. What is the value of the agreed LC?
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10. How many originals of the Vinacontrol inspection certificate must be made out?
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Case 7 Write down the appropriate rule under Incoterms 2020 used in the following transactions scenario.
- Seller: Seattle, USA
- Buyer: HCM, Vietnam
- Commodity: Test Kits-CD123, containerized.
- Quantity: 20,000 sets
- Seller’s responsibility: Deliver the goods to the first carrier named by the buyer in a container yard at
Seattle, USA and make export clearance.
- Buyer’s responsibility: all remaining duties and obligations.
Which rule under Incoterms 2020 should be stipulated in the contract?
Answer: FCA Seattle, USA, Incoterms 2020

Case 8 DRAFTING CONTRACT CLAUSES

You are working for a Vietnamese company located in Hochiminh city. Your company is about to export a
shipment of cashew nut to an buyer in Mumbai, Bombay, India, who is interested in 100 tons, at price of
7.054 USD/ton-FOB, with delivery in December, 20--, payment by L/C.

Draft the clauses of: Commodity, quality, quantity, price, delivery, payment
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