True / False
1. Under common law, a contract is formed when the notice of acceptance has been sent by the mode required by the
other party under the mailbox rule.
a. True
b. False
2. Under common law, the offeror can withdraw his offer if withdrawal occurs before a transmitted acceptance is
received.
a. True
b. False
3. The provisions concerning express and implied warranties are similar under the UCC and CISG.
a. True
b. False
4. A buyer of goods has no obligation under the CISG to examine goods promptly when received and give notice of an
error in shipment.
a. True
b. False
5. Money damages for breach of a sales contract is usually based on the difference between the market price and the
contract price.
a. True
b. False
6. Consequential money damages for breach of a sales contract may also include an amount for lost profits arising as a
reasonably foreseeable loss due to the breach.
a. True
b. False
7. Specific performance is an equitable remedy requiring a party to pay the non-breaching party a specified sum of
money for breach of contract.
a. True
b. False
8. In practice, most force majeure clauses do not excuse a party‘s performance entirely but only suspend it for a
while.
a. True
b. False
9. Cultural influences play an insignificant role in the way people approach contract negotiations and contract drafting.
a. True
b. False
10. U.S. lawyers generally prefer to draft contracts in exacting, detailed, and technical language while Japanese
contracts generally tend to be short and with relatively little detail.
a. True
b. False
11. It is a firmly held principle of international contract law that a seller is always obliged to supply goods in conformity
with the provisions of public law applicable in the country of importation.
a. True
b. False
12. Because the laws are similar in most countries, there are few problems with international sales contracts.
a. True
b. False
13. “Conflict of Laws” in an international setting refers to which nation has the greater interest in applying its laws in the
resolution of contract dispute cases.
a. True
b. False
14. The Convention on Contracts for the International Sale of Goods (CISG) was developed to give U.S. business
an advantage in international sales contracts.
a. True
b. False
15. Socialist law is less flexible and more mechanical than the common law.
a. True
b. False
16. In the People‘s Republic of China, domestic contract law serves largely to enforce commitments made between
state agencies.
a. True
b. False
17. Historically, multinational corporations were at a disadvantage in contact negotiations with developing countries.
a. True
b. False
18. International sales contracts concerning consumer goods sold for personal use come under CISG.
a. True
b. False
19. When an international seller and buyer negotiate a sales contract, they have the option to “opt out” of CISG.
a. True
b. False
20. The term “trade usage“ refers to the customs of an industry, past dealings of merchants, and the usages of trade
terminology and language.
a. True
b. False
21. The CISG makes no provision for “trade usages” since everything is defined.
a. True
b. False
22. Under the CISG, all contracts for the sale of goods must be in writing.
a. True
b. False
23. Where no price term is fixed under CISG, there is no way to have a valid sales contract.
a. True
b. False
24. The CISG requires that an acceptance materially altering the terms of the offer be approved by the original offering
party.
a. True
b. False
25. The CISG says that the remedy of specific performance is allowed where the domestic laws of a country allow such
a remedy.
a. True
b. False
26. Under a device known as nachfrist notice, the CISG allows either party — buyer or seller — to fix an additional
period of time, beyond the date called for in the contract, for the other to perform.
a. True
b. False
27. The CISG is inflexible as to making sure that goods are delivered on a specified date.
a. True
b. False
28. If a seller‘s employees go on strike, is this a commercial impossibility a valid legal excuse for not performing under a
sales contract.
a. True
b. False
29. To use the concept of impossibility of performance as an excuse for nonperformance of a contract requires that the
performance be objectively impossible.
a. True
b. False
30. In certain cases, a court excuses nonperformance of a contract where an unexpected and unforeseeable event
occurs that frustrates the purpose of the contract.
a. True
b. False
31. Commercial impracticability is an excuse for nonperformance of a contract if it adds more than 20% to the cost of
completing performance.
a. True
b. False
32. The Uniform Commercial Code has provisions applicable to international business allowing substituted performance.
a. True
b. False
33. A force majeure clause serves as a general excuse for nonperformance of a sales contract in all situations.
a. True
b. False
34. The Uniform Commercial Code has been approved by all fifty states in one form or another.
a. True
b. False
35. Contract law in all countries require that there be mutual assent in the establishment of a contract between the
parties.
a. True
b. False
36. Under the UCC, between merchants, an offer may not be revoked if it is made in a signed writing that gives
assurance that it will remain open for a stated period of time.
a. True
b. False
37. Under common law, the “mirror image” rule under contracts, require the acceptance by the offeree is definite and
unconditional that matches the offer exactly.
a. True
b. False
38. Article 16, of the CISG an effective acceptance is effective when it reaches the offeror.
a. True
b. False
Multiple Choice
39. A, a New York firm, sends a purchase order to B in Sweden. A standard clause on the purchase order states that
“All disputes are to be heard in the courts of New York.” B confirms using its standard form, which states that “all
disputes are to be resolved in arbitration before the ICC, Sweden.“ Under the CISG:
a. A contract exists on A’s terms because B’s terms were a material alteration and do not become a part of the
contract.
b. A contract exists on B’s terms because the modification is immaterial.
c. No contract exists because B’s terms were a counteroffer that was not accepted by A.
d. A contract exists because A did not promptly object to the new terms.
40. A and B have entered into a sales contract. If it becomes apparent to A that B might not perform a substantial part
of his bargain as promised, A may:
a. Avoid the contract.
b. Suspend performance.
c. Request that B specifically perform.
d. Seek restitution.
41. The following sales are excluded from the CISG:
a. The sale of industrial equipment.
b. The sale of consumer goods.
c. The sale of ships and aircraft.
d. All of the above.
42. Price reduction is not available as a buyer’s remedy for the seller’s breach under the CISG if:
a. The seller has already delivered conforming substitute goods.
b. The buyer has refused to accept the seller’s attempt to cure the breach.
c. The buyer has avoided the contract and refused delivery.
d. All of the above.
43. Contract negotiations in Japan are characterized by all of the following except:
a. The Japanese desire for group harmony and consensus.
b. The importance of not losing face or becoming embarrassed.
c. The presence of lawyers during the negotiations to insure that their clients’ legal interests are protected.
d. The desire to develop a long-lasting business relationship.
e. All of the above are characteristic of contract negotiations in Japan.
44. The following are all problems faced by developing countries in their business contract relationships with wealthier
nations except:
a. Lack of trained professionals to assist their governments in contract negotiations.
b. Lack of natural resources to use as collateral for credit.
c. Lack of economic bargaining power in dealing with more powerful multinationals.
d. Lack of sophisticated legal mechanisms for dealing with contract disputes.
45. Both the U.S. and France have ratified the Convention on Contracts for the International Sale of Goods (CISG). A
buyer in France and a seller in the U.S. enter into a contract for the sale of widgets. If a dispute arises:
a. The CISG will apply since all the requirements have been met.
b. The CISG will not apply since the requirement of “legal selection” has not been met.
c. The Uniform Commercial Code (UCC) will apply since the seller is a U.S. company.
d. Neither the UCC nor CISG will apply.
46. If a question arises over a trade usage, the CISG provides that:
a. No reference to trade usage is allowed by a court.
b. A court can look at those trade usages that the parties knew or ought to have known and are regularly used in
the industry.
c. A court can look at those trade usages to which the parties agree to be bound.
d. Both B and C.
47. Under the CISG, a communication between the parties would be considered an offer when:
a. It is in the form of an advertisement.
b. It leaves the quantity or price terms open.
c. It is sufficiently definite and indicates an intention to be bound.
d. Both B and C.
48. The following elements are all considered to be key elements materially altering the terms of an offer when included
with an acceptance under the CISG except:
a. Price.
b. Place and time of delivery.
c. Specification of the ship to be used for carriage.
d. Settlement of disputes.