LSCM 4360 EXAM 1 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
the advising clause of a contract between an exporter and an agent/distributor spells out the
obligation of both parties in the area of - Answers advertising, trade show attendance, and ownership
of ideas.
the most sensitive issue is an international distribution contract between an exporter and an
agent/distributor is - Answers termination
when an international distribution contract between an exporter and an agent/distributor is
terminate for "just cause," in most cases the termination is made by the - Answers exporter
an increasingly popular way of settling disputes between international exporter-agent/distributor
partners is - Answers arbitration
an exporter's termination of a relationship with an agent/distributor on the basis of "convenience" is -
Answers none of the above
Lex Mercatoria is - Answers trade law made up of a multitude of different sources of law and
jurispurdence
courts generally look at two criteria to determine if a contract is international. those criteria are -
Answers physical delivery and monetary exchange criteria
if an international agreement between an exporter and an agent/distributor grants a monopoly to the
agent/distributor, that agent/distributor is considered to be - Answers an exclusive representative
a legal dispute in which the loser bears court costs is said to be operating under - Answers European
rules
the United Nations Convention on Contracts for the International Sale of Goods (CIGS) considers a
contract to have been accepted - Answers none of the above
a termination for "convenience" is - Answers a termination for any reason other than non-
performance
while an exporter and distributor can agree on what the distributor can add for margin on the
wholesale price of goods, in agency contracts - Answers none of the above
under the United Nations Convention of Contracts for the International Sale of Goods (CIGS), when an
offer is made - Answers it cannot be withdrawn by the buyer or seller before its expiration date
Instead of using courts to settle disputes, an increasing number of contracts call for disputes to be
settled by - Answers an arbitration panel
In judging whether or not a contract has been breached, the Uniform Commercial Code (UCC) applies
the principle of "perfect tender." this means that - Answers the goods and their delivery must exactly
conform to what was written in the contract
a termination of an international contract between an exporter and an agent/distributor can be made
by - Answers either of the parties
contracts contain a force majeure clause which dissolves the contract in the event of a major
unforeseen event, like a ship sinking in a storm. loosely translated, force majeure means - Answers
overwhelming power
unless otherwise specified, contracts between an exporter and an agent and contracts between
exporter and distributor are called - Answers distribution contracts
when a party to a contract is continually looking for loopholes to avoid living up to the obligation of
that contract, it can be said that - Answers that party is not acting in good faith
an export management company earns its revenue through - Answers sales commission
usually, a distributor is located - Answers in the importing country
when a firm realizes that it wants to exploit the possibilities that sales abroad can bring, and decides
to become directly involved in its exporting activities, it is said to be involved in - Answers active
exporting
attempts to reduce business practices that include corruption and bribery have been made by -
Answers organization for economic co-operation and development
the fee a licensee pays a licensor for each use of an intellectual property is called a - Answers royalty
determination of the appropriate method of entry in a new marked depends on - Answers size and
growth of market, potential market share of exporter, type of product and marketing strategy of
exporter, willingness of the exporter to get involved, characteristics of the importing country, and
time horizon considered.
company decides whether market factors favor - Answers manufacturing at home or abroad
manufacturing at home - Answers indirect exporting and active exporting
, indirect exporting - Answers exporter doesnt seek export sales.
allows manufacturers to concentrate on domestic market and leave exporting to the experts.
dont have a long term plan.
active exporting - Answers exporter actively participates in finding potential markets abroad.
best option for large firms or firms with international experience.
learning about foreign markets.
spending money.
export trading companies - Answers firm with offices in multiple countries that purchases goods in
one country and resells them in another
export management corporation - Answers normally located in exporting country.
acts as a rep for the exporter abroad but never takes the title to the goods.
requires more involvement of the exporter, ship goods, invoice the importer, carry the risk of non-
payment, and manage parts of the transaction.
Piggy backing - Answers possibility of a small firm piggy-backing on another firm's efforts to enter a
foreign market.
agent - Answers typically a small firm or individual located in the importing country.
representative of the exporter.
takes commission from exporter.
an agent will rep multiple companies manufacturing products that complement the exporter's
products.
distributor - Answers located in importing country, purchase goods from exporter.
takes title of goods and resells for profit.
international invoice between exporter and distributor and domestic invoice between distributor and
customer.
Legal issues - Answers agents fall under labor law.
distributors fall under contract law.
some countries do not allow agents.
marketing subsidiary - Answers foreign office of a parent organization.
separate entity, wholly owned by parent company.
parent company sells product to subsidiary and subsidiary sells to customer in foreign country.
subsidiary allows for greater control by the exporter.
coordinating direct export strategies - Answers standardized approach and tailored approach
standardized approach - Answers single method of entry in all markets, agents, distributors, or sales
subsidiaries.
tailored appraoch - Answers agent is used in some countries, distributor in others, and marketing
subsidiary in the remainder.
foreign sales corporations - Answers a method for US companies to lower their income tax.
Tax deduction:
subsidiaries must have 95% of assets devoted to export sales.
exported goods must have at least 50% US content.
manufacturing abroad - Answers contract manufacturing, licensing, franchising, joint venture, and
subsidiary
contract manufacturing - Answers agreement with foreign company to manufacture its goods
abroad.
a way for a firm to get its products in foreign country when there are barriers to entry or
transportation costs are too high.
licensing - Answers allows another firm to use its intellectual property in exchange for a royalty/ fee.
can allow use of patented technology, trademarks, brand name or trade secret.
licensor retains ownership and licensee must pay a fee very time it is used.
franchising - Answers involves a bundle of intellectual property items.
allow an entire business model to be used by another firm in exchange for royalties.
best for retail establishments.
joint venture - Answers firm created and jointly owned by two or three companies.
when two or three exporters want to share the costs of investing in a facility abroad.
often companies manufacturing complementary products.
work well while the relationship is strong.
the advising clause of a contract between an exporter and an agent/distributor spells out the
obligation of both parties in the area of - Answers advertising, trade show attendance, and ownership
of ideas.
the most sensitive issue is an international distribution contract between an exporter and an
agent/distributor is - Answers termination
when an international distribution contract between an exporter and an agent/distributor is
terminate for "just cause," in most cases the termination is made by the - Answers exporter
an increasingly popular way of settling disputes between international exporter-agent/distributor
partners is - Answers arbitration
an exporter's termination of a relationship with an agent/distributor on the basis of "convenience" is -
Answers none of the above
Lex Mercatoria is - Answers trade law made up of a multitude of different sources of law and
jurispurdence
courts generally look at two criteria to determine if a contract is international. those criteria are -
Answers physical delivery and monetary exchange criteria
if an international agreement between an exporter and an agent/distributor grants a monopoly to the
agent/distributor, that agent/distributor is considered to be - Answers an exclusive representative
a legal dispute in which the loser bears court costs is said to be operating under - Answers European
rules
the United Nations Convention on Contracts for the International Sale of Goods (CIGS) considers a
contract to have been accepted - Answers none of the above
a termination for "convenience" is - Answers a termination for any reason other than non-
performance
while an exporter and distributor can agree on what the distributor can add for margin on the
wholesale price of goods, in agency contracts - Answers none of the above
under the United Nations Convention of Contracts for the International Sale of Goods (CIGS), when an
offer is made - Answers it cannot be withdrawn by the buyer or seller before its expiration date
Instead of using courts to settle disputes, an increasing number of contracts call for disputes to be
settled by - Answers an arbitration panel
In judging whether or not a contract has been breached, the Uniform Commercial Code (UCC) applies
the principle of "perfect tender." this means that - Answers the goods and their delivery must exactly
conform to what was written in the contract
a termination of an international contract between an exporter and an agent/distributor can be made
by - Answers either of the parties
contracts contain a force majeure clause which dissolves the contract in the event of a major
unforeseen event, like a ship sinking in a storm. loosely translated, force majeure means - Answers
overwhelming power
unless otherwise specified, contracts between an exporter and an agent and contracts between
exporter and distributor are called - Answers distribution contracts
when a party to a contract is continually looking for loopholes to avoid living up to the obligation of
that contract, it can be said that - Answers that party is not acting in good faith
an export management company earns its revenue through - Answers sales commission
usually, a distributor is located - Answers in the importing country
when a firm realizes that it wants to exploit the possibilities that sales abroad can bring, and decides
to become directly involved in its exporting activities, it is said to be involved in - Answers active
exporting
attempts to reduce business practices that include corruption and bribery have been made by -
Answers organization for economic co-operation and development
the fee a licensee pays a licensor for each use of an intellectual property is called a - Answers royalty
determination of the appropriate method of entry in a new marked depends on - Answers size and
growth of market, potential market share of exporter, type of product and marketing strategy of
exporter, willingness of the exporter to get involved, characteristics of the importing country, and
time horizon considered.
company decides whether market factors favor - Answers manufacturing at home or abroad
manufacturing at home - Answers indirect exporting and active exporting
, indirect exporting - Answers exporter doesnt seek export sales.
allows manufacturers to concentrate on domestic market and leave exporting to the experts.
dont have a long term plan.
active exporting - Answers exporter actively participates in finding potential markets abroad.
best option for large firms or firms with international experience.
learning about foreign markets.
spending money.
export trading companies - Answers firm with offices in multiple countries that purchases goods in
one country and resells them in another
export management corporation - Answers normally located in exporting country.
acts as a rep for the exporter abroad but never takes the title to the goods.
requires more involvement of the exporter, ship goods, invoice the importer, carry the risk of non-
payment, and manage parts of the transaction.
Piggy backing - Answers possibility of a small firm piggy-backing on another firm's efforts to enter a
foreign market.
agent - Answers typically a small firm or individual located in the importing country.
representative of the exporter.
takes commission from exporter.
an agent will rep multiple companies manufacturing products that complement the exporter's
products.
distributor - Answers located in importing country, purchase goods from exporter.
takes title of goods and resells for profit.
international invoice between exporter and distributor and domestic invoice between distributor and
customer.
Legal issues - Answers agents fall under labor law.
distributors fall under contract law.
some countries do not allow agents.
marketing subsidiary - Answers foreign office of a parent organization.
separate entity, wholly owned by parent company.
parent company sells product to subsidiary and subsidiary sells to customer in foreign country.
subsidiary allows for greater control by the exporter.
coordinating direct export strategies - Answers standardized approach and tailored approach
standardized approach - Answers single method of entry in all markets, agents, distributors, or sales
subsidiaries.
tailored appraoch - Answers agent is used in some countries, distributor in others, and marketing
subsidiary in the remainder.
foreign sales corporations - Answers a method for US companies to lower their income tax.
Tax deduction:
subsidiaries must have 95% of assets devoted to export sales.
exported goods must have at least 50% US content.
manufacturing abroad - Answers contract manufacturing, licensing, franchising, joint venture, and
subsidiary
contract manufacturing - Answers agreement with foreign company to manufacture its goods
abroad.
a way for a firm to get its products in foreign country when there are barriers to entry or
transportation costs are too high.
licensing - Answers allows another firm to use its intellectual property in exchange for a royalty/ fee.
can allow use of patented technology, trademarks, brand name or trade secret.
licensor retains ownership and licensee must pay a fee very time it is used.
franchising - Answers involves a bundle of intellectual property items.
allow an entire business model to be used by another firm in exchange for royalties.
best for retail establishments.
joint venture - Answers firm created and jointly owned by two or three companies.
when two or three exporters want to share the costs of investing in a facility abroad.
often companies manufacturing complementary products.
work well while the relationship is strong.
