Seller (ABC Trading Co, Vietnam) offers 100 tons of coffee to Buyer (Zin Co., Japan) with the following conditions:

Q1. Seller agrees to deliver the goods to buyer under the term of FCA port of Saigon, Vietnam. The goods were transported and unloaded at the port and kept at customs shed for inspection and payment of duties. The buyer was notified of the arrival of the merchandise and its location. Before the buyer picked up the goods, the customs shed (including the merchandise in it) was destroyed by fire. The buyer claims refund of the purchase price stating that buyer did not receive the goods. Is the seller responsible? Why?

Q2. Seller agrees to deliver the goods to buyer at the following prices: (1) USD120,000 FOB Saigon port; USD140,000 CIF Osaka port; USD160,000 DAP at buyer's warehouse in Osaka, Japan. Freight cost including loading fee to bring the goods from Saigon port to Osaka port is USD15,000. Transportation cost including loading and unloading fee to bring the goods from Osaka port to the buyer's warehouse is USD10,000; Insurance rate is 0.2%. Import duty is 5% of the FOB price.

1. Buyer will choose to buy at what price? Why?

2. What must the seller pay costs and bear risks under the term of DAP at the buyer's warehouse in Osaka?

3. Discuss the major differences between CIF and DAP?

Q3. Buyer agrees to pay by irrevocable letter of credit (L/C) at sight. Discuss the procedure of L/C. Compare the role and responsibility of banks in documentary collections and letters of credit.

Q4. Seller offers 100 tons of coffee to buyer at the selling price of USD120,000 FOB Saigon port, prepare export proposal to negotiate with the buyer. Discuss ZOPA (Zone of Possible Agreement) and how to create more value to deal?