Chapter Quiz

-------------------------------------------------

Top of Form

Chapter 5: International Contracts

1) The advertising clause of a contract between an exporter and an agent/distributor spells out the obligations of both parties in the areas of ___.

a) advertising

b) trade show attendance

c) ownership of ideas

d) All of the above

e) None of the above

Rationale:

The advertising clause spells out obligations regarding advertising, trade show attendance, ownership of ideas, and how the costs will be paid for.

Review this topic

Bottom of Form

2) When an international distribution contract between an exporter and an agent/distributor is terminated for "just cause," in most cases the termination is made by the ___.

a) agent/distributor

b) government of the agent/distributor

c) exporter

d) government of the exporter

e) None of the above

Rationale:

Usually it is the importer not doing something it is required to do, or the representative is doing something that it is contractually not allowed to do. Rarely do exporters fail to fulfill their part of the agreement.

Review this topic

3) An exporter's termination of a relationship with an agent/distributor on the basis of "convenience" is ___.

a) essentially risk-free

b) with little obligation on the part of the exporter to the agent/distributor

c) easy to accomplish

d) in little danger of ending up in court

e) None of the above

Rationale:

A termination for convenience should be handled with the greatest care, as the potential for damages to the spurned party can be substantial. If there are issues to resolve, every effort should be made by the exporter to compensate the distributor or the agent. If it is not done, the representatives can very easily ask courts to intervene. These statutes usually mandate long notice periods and generous compensation packages.

Review this topic

4) Courts generally look at two criteria to determine if a contract is international....