BLAW 497 Exam 2 MC

The Montreal Convention is best described as an example of: a. A self-executing treaty. b. A non-self-executing treaty. c. An example of a custom over time becoming an international treaty. d. A bilateral self-executing treaty.

a. A self-executing treaty.

The Carriage of Goods by Sea Act (COGSA) does not apply to bills of lading: a. Issued for shipments between San Francisco and Los Angeles. b. Issued for shipments between Miami and Sydney. c. If they contain a "Himalaya clause." d. That are "straight."

a. Issued for shipments between San Francisco and Los Angeles.

Country A wants to impose a quota on imports of cars from foreign manufacturers in specific countries but wishes to ensure that one country and its manufacturers do not come to dominate the market on imports by using for itself too much of the entire quota allowed for that group. You should suggest that Country A implement a(n): a. Absolute quota. b. Allocated quota. c. Auctioned quota. d. Global quota

b. Allocated quota.

A _________ is a document issued by a carrier to the shipper upon receiving possession of goods for transport. a. Document of title. b. Bill of lading. c. Negotiable instrument. d. Paramount title document.

b. Bill of lading.

The Montreal Convention provides that an international carrier must pay an amount computed on the value of: a. United States dollars. b. Chinese yuan. c. Special drawing rights. d. Euros.

c. Special drawing rights.

Refer to the Aegon Bricks question. In this case, the buyer in Germany will seek the opposite i.e., the delivery terns that most reduce its own risks and costs while shifting them to ABI. This means the buyer will seek to negotiate a delivery term called: a. FCA b. DAT c. DAP d. DDP

d. DDP

Computation of maximum carrier liability is often difficult in damage claims because of the lack of clarity defining the term: a. Average. b. Container. c. Pallets. d. Package.

d. Package.

A contract between buyer and seller calling for seller to deliver the goods to buyer's specified location (e.g., buyer's factory) is called a: a. Bill of lading agreement. b. Destination contract. c. Shipment contract. d. Freight forwarder contract.

b. Destination contract.

John flies from New York City to Athens directly. When he arrives, he discovers his luggage has been lost and is not found after a search. He places a claim with the air carrier seeking a recovery that will compensate him for his loss of bag and contents, including the replacement value of a diamond ring worth $10,000 he was taking to Greece as a gift for his fiancée. The air carrier under the Montreal Convention will pay him an amount equal to approximately: a. $153,000. b. $10,000. c. $1,600.

c. $1,600.

ABC Inc. is a Texas company that wants to sell its products to a buyer in Guatemala for the first time. It has never been in an international transaction before and is worried about payment. Its best and most likely strategy is to: a. Demand that the buyer pay before shipment for all product or else it will not do business with them. b. Let buyer to have an open account with it but on short payment terms, e.g., 20 days. c. Implement a documentary collection process whereby a bank acts as an inte

c. Implement a documentary collection process whereby a bank acts as an intermediary.

Both the UCC and the CISG allow a seller to cure a ____ within a reasonable time. a. Fundamental breach of any kind. b. Breach of mailbox rule. c. Breach of parol evidence rule. d. Nonconforming shipment

d. Nonconforming shipment

A(n) ________ is a relationship separating ownership and possession of personal property. a. Bailment b. Negotiation c. Commercial invoice d. Air waybill

a. Bailment

Tom travels by air from Miami to New York, and then has a three-hour layover before he boards a flight to London. He is injured when aircraft encounters bad turbulence, lands in Charlotte, and the erratic landing there injures his leg. Is his injury covered by absolute liability provisions of Montreal Convention? a. Yes, if he is deemed to be in one undivided carriage (i.e., all segments booked on one ticket) that is part of a single operation. b. Yes, since New York-London segment makes this au

a. Yes, if he is deemed to be in one undivided carriage (i.e., all segments booked on one ticket) that is part of a single operation.

John is new to the international commercial sales world and knows he needs help in dealing with delivery/shipment issues involving contracts with buyers. His best resource may be to rely upon and use: a. Multimodal transport documents b. Freight forwarders c. Electronic data interchange d. Air waybills only

b. Freight forwarders

Charles is a farmer who grows tobacco. He delivers 1,000 pounds of tobacco leaves to a warehouse in Memphis (Bob's Warehouse) and it issues to him a warehouse receipt for all products. Charles sells the tobacco and as part of the transaction delivers the warehouse receipt to buyer. This is an example of: a. Constructive delivery b. Negotiation c. Documentary collection d. A bill of lading

b. Negotiation

India imposes special licensing requirement for many imported goods. The application for a special license must be made by an "Actual user." If a wholesaler or distributor applies for a license, the license is "capped" to a total monetary amount measured in SDRs, e.g., value of resales by licensor may not exceed a negotiated SDRs amount. A license terminates after resales exceed that amount but can be renewed by another, separate application. The US complains to WTO that these licensing restrict

c. US will claim prior India case controls. Allowing complete discretion for India to set monetary limits on licenses it grants to distributors is a superficial change and is overly-restrictive. It accomplishes the same unreasonable barriers to trade protections as did prior case struck down by the Settlement Panel.

In a _____, the seller passes the risk of loss or damage to the buyer when the goods are given to the first carrier. a. Bailment agreement. b. Shipment contract. c. Destination contract. d. "D Term agreement."

b. Shipment contract.

Prior to formally requesting binding dispute resolution with the WTO Dispute Resolution Body, the party complaining about a tariff violation must: a. Ask for informal resolution with the International Trade Organization (ITO). b. Mediate their dispute with a third party neutral, not affiliated with WTO. c. Give written notice to the United Nations of such dispute. d. Conduct trade consultations with the offending party at the WTO.

d. Conduct trade consultations with the offending party at the WTO.

The price charged to transport cargo is called: a. Wharfage. b. Freight. c. Particular average. d. General average.

b. Freight.

All of the different "Rounds" of multilateral trade negotiations had the same goal of: a. Eliminating indirect non-tariff barriers. b. Trade liberalization. c. Tariff bindings. d. Ensuring equality of growth in national economies.

b. Trade liberalization.

The fastest growing mode of ocean transport is called: a. Dry bulk ships. b. Reefer ships. c. Containerized ocean cargo. d. Tankers.

c. Containerized ocean cargo.

Country A imposes an import tax on fungible goods such as oil, wheat, or timber that enter specially from country B. This is likely called a: a. Global tariff. b. Specific or flat tariff. c. Percentage of value (ad valorem tariff). d. Unitary tariff.

b. Specific or flat tariff.

The COGSA per-package liability limitation for carriers is ________ per package or customary freight unit. a. 1,131 SDRs (similar to the lost baggage limitation under the Montreal Convention) b. $2,500 (or proved value of the loss, whichever is less) c. $500 d. $10,000

c. $500

John owns a small tractor. He "loans it out" to Fred who will use it for plowing his farm on basis he will return it to John when done. John and Fred are in order: a. Bailor and bailee. b. Bailee and bailor. c. Both are a bailor. d. Both are a bailee.

a. Bailor and bailee.

A California seller has a sales contract to deliver a ton of cement to a Utah buyer. If the Utah buyer is most worried about damage to the goods it is buying and wants to best protect its interests, it will ask for: a. The carrier to provide a straight bill of lading. b. The carrier to provide a clean bill of lading. c. The carrier to provide a received-for-shipment bill of lading. d. The seller to provide a clean bill of lading.

b. The carrier to provide a clean bill of lading.

A basic right of WTO membership is that a country must treat goods and services from all WTO members: a. With no tariff on any goods imposed on any other member nations, except with WTO advance consent. b. In accordance with transparent tariff rates i.e. available to public. c. In accordance with the Generalized System of Preferences. d. Equally and without discrimination

d. Equally and without discrimination

A bill of lading does not accomplish which role below? a. Acts as a receipt of goods and is issued by shipper. b. Becomes a contract of carriage between shipper and carriage. c. Acts as a document of title to specified goods. d. Acts as a receipt of goods and is issued by carrier

a. Acts as a receipt of goods and is issued by shipper.

Examples of negotiable instruments include: a. Check and promissory note. b. Check and documentary draft. c. Certificate of inspection and certificate of analysis. d. Documentary draft and promissory note.

a. Check and promissory note.

You are in charge of tariff policy for your country. You are asked to place an import restraint on products from a politically-allied nation. The restraint must be subtle and most difficult to detect and be "safe" from attack in the press. Your best suggestion is to implement: a. A global tariff with all nations treated equally. b. Use of indirect non-tariff barriers by administrative regulations which are facially neutral but which impact imports by ally negatively as applied. c. Use of an ad v

b. Use of indirect non-tariff barriers by administrative regulations which are facially neutral but which impact imports by ally negatively as applied.

A ____ represents ownership of the goods specified. a. Incoterm. b. Transfer deed. c. Shipment contract. d. Document of title.

d. Document of title.

Admiralty jurisdiction applies to the operation and management of vessels while engaged in navigation on: a. Oceans and seas only. b. Rivers only. c. Ocean and large lakes only. d. "Navigable waters" used or capable of being used for commercial activity.

d. "Navigable waters" used or capable of being used for commercial activity.

One of the principles of the WTO is that whereby members must eliminate quoatas and other non-tariff barriers and convert them into tariffs. This is called: a. Consultation. b. Tariffication. c. Nullification. d. Transparency.

b. Tariffication.

Colombia taxes sales of tobacco products sold in that country. The tax is different for differently-classified products. Cigarettes are generally taxed on their sale at 15% while "menthol cigarettes" are taxed at 25%. Most cigarettes classified as "menthol" are made by foreign companies who pay the same tariff rate upon import into the country of cigarettes of any kind, i.e., there is no higher tariff for "menthol cigarettes." The foreign "menthol cigarette" makers claim this sales tax is discri

a. Colombia can claim nondiscrimination since tariff rates are equal on all products.

A balance-of-payment deficit arises: a. Frequently when country does not have MFN status. b. When nation's outflow of foreign exchange exceeds it receipts in its own currency. c. If its level of exports becomes less than 150% of that same figure in 1947 when GATT began. d. When a US Company's total dollar value of its imports exceeds the dollar value of its exports.

b. When nation's outflow of foreign exchange exceeds it receipts in its own currency.

Michelle leaves Miami on a flight bound for London. While proceeding up the east coast over Virginia, the plane makes an emergency landing and crashes too hard on the ground. Michelle is hurt. She brings a lawsuit under Virginia tort law seeking $250,000 for bodily injuries caused by pilot negligence, in addition to a recovery under the Montreal convention. The court will likely: a. Decide both the state tort law claim and Montreal convention claim. b. Refuse to hear either claim. c. Decide only

c. Decide only the Montreal Convention claim as the exclusive remedy.

A widget is imported into the US from South Africa. Once in the US, it is transported via rail from the entry port to Chicago. It has imposed on it then a special "Foreign Product Transportation Fee" that is not placed on transported products of domestic manufacturers. This is deemed inconsistent and invalid under: a. Tariff discrimination laws. b. WTO Dispute Settlement Body. c. International Trade Organization (ITA). d. "National treatment" principle of GATT.

d. "National treatment" principle of GATT.

A cargo vessel is owned by A. While on the ocean, the vessel springs a bad leak. The captain throws cargo overboard that belongs to B and C to make the vessel lighter. D also has cargo on the vessel which remains in the vessel and is not damaged or removed. Who will file a claim for general average against whom? a. A will have a claim against B, C and D. b. D has a general average claim against A. c. A has a general average claim against D. d. B and C have each a general average claim against D

d. B and C have each a general average claim against D

In 1944, the allied nations met at the Breton Woods Conference and out of concern with the "post-war" economies of the nations of the world created: a. United Nations and World Trade Organization. b. General Agreement on Trade and tariffs and United Nations. c. World Bank and International Trade Organization. d. International Monetary Fund and World Bank.

d. International Monetary Fund and World Bank.

Jill is a passenger on an international flight covered by the Montreal Convention (MC). Her luggage is stolen. She is shocked because her Wimbledon tennis trophy was in the bag and is now gone. She is upset, becomes angry and is in tears, and later sues (in appropriate court) the air carrier for losing her luggage and causing her emotional distress in amount of $500,000. What is the result in court? a. Approximately $501,500 USD awarded by a court. b. She will receive from MC the maximum amount

d. Maximum amount under MC allowed, e.g., approximately $1,600 USD.

The Uruguay Round from 1986 to 1994 ushered in significant changes to international trade regulation. These changes included all of the following except: a. Replacing the original GATT organization with the World Trade Organization. b. Elimination of all non-tariff trade barriers. c. Instituting a binding dispute settlement procedure. d. Expanding the scope of existing trade agreement.

b. Elimination of all non-tariff trade barriers.

Based on its economic growth in the past decade or so and global impact, the most significant admission into the WTO of a new member was in 2001 with the admission of ____________. a. China. b. Brazil. c. Russia. d. Germany.

a. China.

Credit risk of seller is completely eliminated by the seller: a. Demanding payment prior to shipment. b. Allowing buyer to purchase goods on an approved open account. c. Demanding use of negotiable instruments by buyer at all times. d. Eliminating delivery risk.

a. Demanding payment prior to shipment.

ABC Company in New York is financially distressed. It needs the revenue generated by a huge volume sale of its products to a big German company. The good are given to a carrier in New York who issues a bill of lading to ABC who then negotiates the bill of lading with the German buyer for an agreed price. A US creditor of the seller attempts to put a lien on the goods to satisfy its debt. Who has a greater claim to the goods-the creditor or the buyer in Germany? a. The German buyer only if it mee

a. The German buyer only if it meets the standard of being a "good faith purchaser" of the bill of lading.

Aegon Bricks Inc. (ABI) in New Orleans is negotiating a contract to sell a German company in Berlin approximately 1,000,000,000 bricks. ABI wants to place the "most seller-friendly" delivery terms under INCO and reduce its delivery risks and financial risks to greatest extent possible. This means it will try to negotiate delivery terms of: a. FCA Free carrier b. EXW c. CIF d. FAS

b. EXW

COGSA exempts carriers from liability from: a. Piracy, i.e., theft of cargo by pirates on the high seas. b. Perils of the sea. c. Negligence by owners of the vessel. d. Damages caused by unseaworthiness of the vessel during voyage.

b. Perils of the sea.

The US wishes to publish its tariff rate on a product. There is some need for flexibility in the US rate determination predicted, so you advise that the easiest strategy is to publish a specific "ceiling" rate and use discretion to reduce rate as appropriate. This "ceiling tariff rate" is called: a. A harmonized rate. b. The bound rate. c. A tariff binding. d. A concession rate.

b. The bound rate.

A shipper places 1,000 toys loose into a container and states "1,000 toys in container" on bill of lading. The container is severely damaged and 100 of the toys are destroyed inside the container. What is the carrier's liability? a. $500,000 b. $50,000 c. $500 d. None of these are correct.

c. $500

Your government asks for advice. It wishes to place a financial barrier on the entry of lace-up shoes being exported into the country by foreign manufacturers. It is intended to be a simple-to-enforce financial barrier. You suggest the easiest and simplest type tariff called a: a. A flat tariff based on the country of origin. b. An ad valorem tariff based on the country or origin. c. A global, flat tariff. d. A combined quota-tariff.

c. A global, flat tariff.

One of the main principles of the GATT system was a commitment by nations to: a. Create the World Trade Organization. b. Eliminate indirect non-tariff barriers to trade. c. Conduct of regular multilateral trade negotiations. d. Stabilize tariff rates at then current levels and achieve greater stability in foreign commerce.

c. Conduct of regular multilateral trade negotiations.

As of January 2017, the maximum carrier liability from passenger death or bodily injury is in US dollars approximately: a. $1,000,000 b. $1,000,110 c. $2,500,231 d. $153,000

d. $153,000

You are engaged with several nations as a trade representative of your country to create a free trade area agreement. As an example to argue in favor of such arrangement, you would cite any of the below as a success story of such structure except: a. United States - Central America - Dominican Republic Free Trade Agreement. b. North American Free Trade Agreement. c. US - Korea Free Trade Agreement. d. Caribbean Basin Initiative.

d. Caribbean Basin Initiative.

John is a US citizen who lives in Seattle with his spouse. He is in Mexico on a business trip. While there after a week, he buys an airline ticket at the counter in the Mexico City airport to fly from Mexico City to Lima, Peru. While in flight, the plane crashes in the jungles of Colombia and he is killed. His spouse wishes to sue the Air France carrier he was flying on in a civil lawsuit for causing John's wrongful death. In which countries that signed MC can she NOT sue? a. France b. United St

d. Colombia

John works on a dredge that removes dirt and silt from bottom of Shiloh River. This is basically a "crane" sitting on a platform that is barely moveable. He is injured by another vessel striking the dredge while he was operating it. Can his lawsuit be heard by a court with admiralty jurisdiction? a. No, if his negligence contributed to his injury. b. No, if dredge was within 50 feet of land his injury is not a "maritime tort." c. No, rivers are not "navigable water" such as an ocean or sea. d. Y

d. Yes, if the river is "navigable water." Dredge is a "vessel."