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Question 1(10 points) You are the sales manager of Wilson Resources, LLC (Wilson), a Houston, Texas-based business.You are arranging a sale by Wilson of six

Question 1(10 points)

You are the sales manager of Wilson Resources, LLC ("Wilson"), a Houston, Texas-based business.You are arranging a sale by Wilson of six (6) shipments of Texas crude oil to a customer in Japan.Which of the following transaction structures would provide Wilson with the greater degree of protection from transaction risk (in particular, payment or credit risk)?

Question 1 options:

sale on open account terms

documentary sale

res ipsa loquitorsale

Question 2(10 points)

Same facts as in the immediately preceding question.If the potential Japanese customer is willing to structure the transaction as a documentary sale but the Japanese customer wants to minimize its potential transaction risk (in particular, delivery risk) which of the following is most likely to be to the Japanese customer's benefit in addressing that concern?

Question 2 options:

Inclusion of a certificate of inspection/analysis and certificate of insurance in the documents required to be tendered by the seller (or a bank)(along with the bill of lading) in order to receive payment.

Requiring as a term of the contract that the bill of lading be tendered by the seller (or a bank) no earlier than thirty days after seller has made payment

Paying in advance for the oil

Question 3(10 points)

Same facts as No. 1.If the transaction is structured as a documentary sale, the Japanese customer would have the ability to do the following (which it could not do if the transaction was structured as a sale on an open account) after making payment and receiving the bill of lading but while the oil was still in transit across the ocean;

Question 3 options:

Sell the oil (by negotiating the bill of lading) to a third party

Back out of the purchase of the oil by returning the bill of lading so long as it does so before the ship carrying the oil reaches the port of destination

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