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

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

____________
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

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

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


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

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

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)

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

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?

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


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


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


60.C

70.C

80.C

90.B

100.A