An Importer Will Generally Try to Avoid Making Payment for a Purchase

question 50

Multiple Choice

An importer will generally try to avoid making payment for a purchase before the goods are actually shipped by

• A) purchasing a letter of credit.
• B) having payment sent to a bank in the exporter's country to be held until proper shipment is made.
• C) post-dating a check.
• D) insisting on payment only upon delivery.

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Definitions:

Acceleration Clause

A clause in a debt instrument (e.g., a mortgage) that requires the payment of the balance of the debt on the happening of a specific event, such as default on an installment payment.

Equitable Mortgage

A mortgage subsequent to the first or legal mortgage. A mortgage of the mortgagor’s equity.

Covenant to Pay

An agreement in a contract where one party promises to pay a specified sum to another.

Original Mortgagor

is the initial borrower who takes out a mortgage loan secured by the property being mortgaged.