Question 1

Under accounts receivable financing,the factor is protected from contract claims for defective goods by the holder in due course rules.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit,but the seller has shipped worthless goods to the buyer.Which of the following statements,if any,are true?

Accepted Answer

A)  As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer. 
B)  If there is fraud in the transaction, the bank will have to reimburse the buyer and seek its remedies against the seller. 
C)  The strict compliance principle insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract. 
D)  As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer and the strict compliance principle insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract. 
A)  As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer. 
B)  If there is fraud in the transaction, the bank will have to reimburse the buyer and seek its remedies against the seller. 
C)  The strict compliance principle insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract. 
D)  As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer and the strict compliance principle insulates the bank from liability, since it assures the bank that the underlying contract between the buyer and seller is entirely independent from the letter of credit contract.

Question 3

An international draft is an order from the seller to the buyer or the buyer's bank to pay the seller upon delivery of goods or the presentation of documents.Thus,the seller is both:

Accepted Answer

A)  the drawer and the drawee. 
B)  the drawer and the payee. 
C)  the drawee and the payee. 
D)  the seller is only the drawer. 
A)  the drawer and the drawee. 
B)  the drawer and the payee. 
C)  the drawee and the payee. 
D)  the seller is only the drawer.

Question 4

Assume that DownPillow sells pillows to a Japanese buyer and forwards documents and a draft for acceptance.Assume also that DownPillow discounts the trade acceptance to a U.S.bank,which then discounts the instrument in the credit markets.If the pillows turn out to be moldy and worthless,which of the following statement(s)is (are)true?

Accepted Answer

A)  The Japanese buyer does not have to pay because the pillows are damaged. 
B)  The U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow. 
C)  The Japanese buyer must still honor and pay the acceptance upon presentation. 
D)  The Japanese buyer does not have to pay because the pillows are damaged and the U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow. 
E)  All of these are correct. 
A)  The Japanese buyer does not have to pay because the pillows are damaged. 
B)  The U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow. 
C)  The Japanese buyer must still honor and pay the acceptance upon presentation. 
D)  The Japanese buyer does not have to pay because the pillows are damaged and the U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow. 
E)  All of these are correct.

Question 5

Draft a specialized letter of credit,recalling some of the uses noted in the text.

Accepted Answer

Dear [Recipient],

We are writing to req

Under accounts receivable financing,the factor is protected from contract claims for defective goods by the holder in due course rules.

Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit,but the seller has shipped worthless goods to the buyer.Which of the following statements,if any,are true?

An international draft is an order from the seller to the buyer or the buyer's bank to pay the seller upon delivery of goods or the presentation of documents.Thus,the seller is both:

Draft a specialized letter of credit,recalling some of the uses noted in the text.

Introduction to International Business

International Law and the World's Legal Systems

Resolving International Commercial Disputes

The Formation and Performance of Contracts for the Sale of Goods

The Documentary Sale and Terms of Trade

Legal Issues in International Transportation

National Lawmaking Powers and the Regulation of U.S.Trade

The World Trade Organization: Basic Legal Principles

Laws Governing Access to Foreign Markets

Regulating Import Competition and Unfair Trade

Imports,Customs,and Tariff Law

Export Controls and Sanctions

North American Free Trade Law

The European Union

Marketing: Representatives,Advertising,and Anti-Corruption

Protection and Licensing of Intellectual Property

The Legal Environment of Foreign Direct Investment

Labor and Employment Discrimination Law

Environmental Law

Regulating the Competitive Environment

Filters

Exam 7: Bank Collections and Letters of Credit

Under accounts receivable financing,the factor is protected from contract claims for defective goods by the holder in due course rules.

Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit,but the seller has shipped worthless goods to the buyer.Which of the following statements,if any,are true?

An international draft is an order from the seller to the buyer or the buyer's bank to pay the seller upon delivery of goods or the presentation of documents.Thus,the seller is both:

Draft a specialized letter of credit,recalling some of the uses noted in the text.

Introduction to International Business

International Law and the World's Legal Systems

Resolving International Commercial Disputes

The Formation and Performance of Contracts for the Sale of Goods

The Documentary Sale and Terms of Trade

Legal Issues in International Transportation

National Lawmaking Powers and the Regulation of U.S.Trade

The World Trade Organization: Basic Legal Principles

Laws Governing Access to Foreign Markets

Regulating Import Competition and Unfair Trade

Imports,Customs,and Tariff Law

Export Controls and Sanctions

North American Free Trade Law

The European Union

Marketing: Representatives,Advertising,and Anti-Corruption

Protection and Licensing of Intellectual Property

The Legal Environment of Foreign Direct Investment

Labor and Employment Discrimination Law

Environmental Law

Regulating the Competitive Environment

Filters