The shipping term where payment is due on delivery and the buyer cannot inspect prior to payment is known as what?

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Study for the Chartered Property Casualty Underwriter 530 Exam with flashcards and multiple choice questions. Each question has hints and explanations to enhance your understanding and prepare you thoroughly.

Multiple Choice

The shipping term where payment is due on delivery and the buyer cannot inspect prior to payment is known as what?

Explanation:
Collect on delivery is the shipping term where payment is due when the carrier delivers the goods, and the buyer cannot take possession or inspect the goods until payment is made. This arrangement protects the seller by ensuring payment before transfer of title, and if the buyer refuses or cannot pay, the carrier can return the goods. The other terms don’t describe a payment-at-delivery setup: risk is about potential loss or damage, implied warranty of merchantability concerns product quality, and election is a legal right to choose among options.

Collect on delivery is the shipping term where payment is due when the carrier delivers the goods, and the buyer cannot take possession or inspect the goods until payment is made. This arrangement protects the seller by ensuring payment before transfer of title, and if the buyer refuses or cannot pay, the carrier can return the goods. The other terms don’t describe a payment-at-delivery setup: risk is about potential loss or damage, implied warranty of merchantability concerns product quality, and election is a legal right to choose among options.

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