Chap 10 Terms of Payment

1、Copy Right 1Copy Right 2Terms of PaymentqPart One: PaymentqPart Two: Urging Establishment of L/CqPart Three: L/C Amendment & ExtensionCopy Right 31. PaymentqTools of PaymentqMethods of PaymentqAspects of L/CqSample Letter 1qSample Letter 2qUseful ExpressionsqHomework AssignmentsCopy Right 41.1 T

2、ools of PaymentqCashqDraft or Bill of DraftqPromissory NoteqCheckCopy Right 51.2 Methods of PaymentqRemittanceM/TT/TD/DqCollectionD/PD/AqLetter of CreditCopy Right 61.3 Aspects of L/CqTypes of L/CqParties of L/CqProcedure of Issuing L/CCopy Right 7Cash on DeliveryDear Sirs,Thank you for your order n

3、o.6464 of 28 April for 40 aluminum sink units.We would like to arrange immediate shipment. Unfortunately, we do not have sufficient credit information to offer you open account terms at this time.Would it be acceptable to ship this order cash on delivery?If you wish to receive open account terms for

4、 your next order, please provide us with the standard financial statement and bank reference. This information will be held in strictest confidence.We look forward to hearing from you.Copy Right 8Cash against DocumentDear Sirs,We refer to your contract no. 482 covering nylon thread in the amount of

5、GB900 and contract no. 483 for cotton thread in the amount of GB750.Since both these contracts are less than GB1,000 in value, we would like you to ship the goods to us on a cash against documents (CAD) basis.We trust that this arrangement will meet with your approval and look forward to your early

6、reply.Copy Right 9Reply to CADDear Sirs Thank you for your letter of 2 October requesting payment against documents for contract nos. 482 and 483. We are pleased to say that we agree to your request. We wish, however, to make it clear that in future transactions, direct payment will only be acceptab

7、le if the amount involved for each transaction is less than BG1,000 or the equivalent in RMB. Should the amount exceed that figure, payment by letter of credit will be required.We would like to say that the exception is allowed only in the light of our long and mutually beneficial association.Copy R

8、ight 10Request for D/ADear SirsWe are a chain of department stores in Manhattan and have recently decided to stock a range of silver cutlery.We believe that there is a possibility of reasonable sales but we cannot count on this. Prices for the range will be considerably higher than for our present l

9、ines and, in the circumstances, we do not feel able to make purchases on our own account.We would like to ask, therefore, whether you would be willing to send us a trial delivery for sale on D/A terms. We would hope to place firm orders once the demand for this cutlery has been ascertained.We believ

10、e our proposal is a logical way to test the market and hope that you will be willing to cooperate with us.As to our financial standing, you can check this with our bankers,the Manhattan Bank, New York.Yours Sincerely,Copy Right 11Reply to the Request for D/ADear Sirs,Thank you for your letter of 11

11、November 1996.We have considered your request for a trial delivery of silver cutlery on documents against acceptance terms, but regret to say that we cannot agree to your proposal.As an exception, the best we can do for the trial is to offer you direct payment at sight terms.If you accept our propos

12、al you run very little risk, since our silver cutlery is well known for its quality, attractive design and reasonable price. Our lines sell very well all over the world and have done so for the last 100 years. We do not think you will have any difficulty in achieving a satisfactory volume of sales.I

13、f you find our proposal acceptable, please let us know and we can the expedite the transaction.Yours Sincerely,Copy Right 12Decline Open AccountDear Sirs,Thank you for your order no.6565 of 1 July for 100 dozen pairs of shoes.I regret to say that our records show that we do not have a sufficient bas

14、is for extending open account terms to you at present.We can fulfill your order only on receipt of a confirmed, irrevocable letter of credit. We are sorry for the delay and await your instructions.Copy Right 13Suggest Payment by Time L/CDear SirWe would like to place an order for 500 Irina 262 elect

15、ric typewriters at your price of USS300 each, CIF Lagos, for shipment during November/December.We would like to pay for this order by a 30-day L/C. This is a big order involving USS150,000and ,since we have only moderate cash reserves, tying up funds for three or four months would cause problems for

16、 us.We much appreciate the support you have given us in the past and would be most grateful if you could extend this favour to us. If you are agreeable, please send us your contract. On receipt, we will establish the relevant L/C immediately.Copy Right 14Reply to the aboveDear Sir,Thank you for your

17、 order for 500 Irina 262 typewriters by your letter of 17 July.We have considered your proposal to pay by a 30-day letter of credit. We do not usually accept time credit. However, in view of our long and mutually beneficial relationship. we are willing to make an exception this time.I must stress th

18、at this departure from our usual practice relates to this transaction only. We cannot regard it as setting a precedent for future transactions.I enclose our sales contract no.834 covering the order. I would be grateful if you would follow the usual procedure.Copy Right 15Request for Confirming L/CDe

19、ar SirWe would like to draw your attention to our order no. 465 for 200 pieces of cotton print. On 2 march, we sent you an irrevocable letter of credit which expires on 31 May.This is our busy season and our buyers urgently need the goods, we shall therefore be very grateful if you ship the goods as

20、 soon as possible. We must stress that any delay in shipping the order will involve us in problems with our buyers which could affect our future business.We look forward to hearing from you.Yours Sincerely,Copy Right 161.4 Sample Letter 1Dear SirsWe refer to our letter of enquiry dated the 5th Octob

21、er. We have received your Proforma Invoice No. 03688 and now wish to place an initial order for 1,500 tapes Type No. EM127DN. The order number is 7305.We have instructed our bank, the general Commercial Bank of Venezuela to open an irrevocable documentary letter of credit in your favour. The amount

22、is 1,275.00. This credit will be confirmed soon by our banks correspondent in London. You are authorized to draw a 60 days draft on our bank against this credit for the amount of your invoice. Your draft must be accompanied by complete set of shipping documents, consisting of:Copy Right 171.4 Sample

23、 Letter 1 (continued) A full set of clean shipped Bill of Lading Commercial Invoice 5 copies The Insurance Certificate 2 copiesOur bank will accept your 60 days draft on them for the amount of your invoice including the cost of freight and insurance, as agreed. Your bill will therefore be at 60d/s f

24、or full CIF invoice value. The credit is valid until the 12th February.Yours sincerely Copy Right 181.5 Sample Letter 2Dear SirsWe thank you for your letter of 14th November, 19.We are pleased to receive your order, and wish to say that we have adequate stocks of Type EM127DN tapes in our warehouse,

25、 and that delivery date can be met.Payment by irrevocable letter of credit is convenient for us, and we shall draw a 60d/s bill on your bank.We are now awaiting the arrival of your L/C, on receipt of which we shall make the necessary arrangements for the shipment of your order. Any request for furth

26、er assistance or information will receive our immediate attention.Yours sincerely Copy Right 19Irrevocable L/C No. 94625Dear SirsYour are hereby authorized to draw on Hua Feng Trading Co., Singapore for a sum not exceeding USD7,850.00 CIF(Say US Dollars Seven Thousand Eight Hundred and Fifty only) a

27、vailable by your draft, drawn in duplicate, on them at sight, accompanied by the following documents:1) 3 non-negotiable copies of clean shipped on board bill of lading, marked “Freight prepaid”;2) Signed Invoice in triplicate;3) Certificate of Origin in duplicate;4) Insurance Policy in duplicate co

28、vering WPA & War for full invoice value plus 10%.Copy Right 20Irrevocable L/C No. 94625Evidencing shipment from Shanghai to Singapore of the following merchandise: 500 dozen T-shirts as per S/C No. 1023 dated June 15, 1994. Condition of Shipment:1) Transshipment is prohibited;2) Partial shipment

29、s are permitted.This credit expires on August 18, 1994 and is subject to the Uniform Customs & practice for Documentary Credits (1983 Revision) International Chamber of Commerce Publication No.400.Yours sincerely Copy Right 211.6 Useful ExpressionsCopy Right 221.7 Homework AssignmentsCopy Right

30、232. Urging Establishment of L/CqIntroductionqSample LettersqUseful ExpressionsqHomework AssignmentsCopy Right 242.1 IntroductionqReasons for Rushing L/CqAttention to Rushing L/CqWriting Principles for Rushing L/CCopy Right 252.1.1 Reasons for Rushing L/CqTo remind, in advance, the importer to open

31、L/C in accordance with the time provided in the contract;qTo urge the importer to rush establishment of L/C, as he has exceeded the time limit.Copy Right 262.1.2 Attention to Rushing L/CqNot too strongly blame the buyer for non-performance of contract.qThe first message sent should therefore be a po

32、lite note;qIf the first message brings no reply , a second one will be sent, expressing disappointment and surpriseCopy Right 272.1.3 Writing Principles for Rushing L/CqMessages urging establishment of L/C must be written with tact.qTheir aim is to persuade the buyer to co-operate more closely and i

33、n fact to fulfill his obligation; otherwise they will give offence to the buyer and bring about unhappy consequences.Copy Right 28Rush L/C-01Dear Mr. Lino:This is to refer to our Sales Confirmation No. YU987 covering 2,000 pieces of art. No. GF543 for shipment during April, 19-. We are disappointed

34、to note that we have so far not received your L/C though you promised to establish it immediately after the signing of the contract. In the present circumstances, shipment would have to be postponed and, certainly, this is not our fault.Please give this matter your immediate and take appropriate mea

35、sures to fulfill your obligations without further delay.Your prompt reply will be appreciate.Yours faithfully,Copy Right 29Rush L/C-02Dear Sir We refer to your order for 500 dozen pairs of Viva jeans and our sales confirmation no.341. We would like to remind you that the delivery date is approaching

36、 and we have not yet received the covering letter of credit.We would be grateful if you would expedite establishment of the L/C so that we can ship the order on time.In order to avoid any further delay, please make sure that the L/C instructions are in precise accordance with the terms of the contra

37、ct.We look forward to receiving your response at an early date.Yours Sincerely.Copy Right 30Rush L/C-03Dear SirsWe wish to inform you that the goods under S/C Nos. 2567 and 2568 have been ready for quite some time. According to the stipulations in the foregoing1 sales confirmations, shipment is to b

38、e made during May/June. We sent you a telex two weeks ago asking you to expedite the relevant L/C, The telex reads;SC2567/8 GOODS READY PLS OPEN L/C IMMDLY RGDSBut much to our disappointment2, we have not received any reply up to now, We, therefore, again sent you a telex yesterday, reading;OTLX APR

39、IL 5TH UNLESS L/C ARVS BY END OF APRIL UNABLE TO EFFECT SHIPTWITHIN STIPULATED TIME. RGDS.The shipment date is approaching,. We must point out that unless your L/C reaches us by the end of this month, we shall not be able to effect shipment within the stipulated time limit.Copy Right 31Rush L/C-03Yo

40、u may recall the following points concerning the establishment of Ls/C as stated in our previous correspondence4;1. Ls/C with details should reach us one month preceding5 the establishment of Ls/C as stated in our previous correspindence4;2. If orders are booked for prompt shipment, it is necessary

41、to establishing the Ls/C by telex or cable.3. Ls/C are to be made as concise as possible. When establishing the Ls/C, please make sure that the L/C stipulations are in exact accordance with the terms set forth in our sales confirmation.We hope this letter will receive your prompt attention.Sincerely

42、 yours Copy Right 32Reply to Letter-03Dear SirsYour letter of April 19 as well as your telexes of April 5 and 18 has been received. The L/C in question6 has already been opened and sent. It might have crossed your letter under reply7. We reported the matter to our director, who was then attending th

43、e Guangzhou Fair, and asked him to inform your delegation accordingly8. However, upon his return, we learned that the message did not reach him in time, so that he was unable to do so.Copy Right 33Reply to Letter-03For your information, we are enclosing a photostatic copy of Documentary Credit No.73

44、41-FE dated April 15th, covering the specific sales confirmations:S/C No. 2567 RMB4,369.38 Enamel10ware11S/C No. 2568 RMB721.30 ToysTotal: RMB5,090.58Please verify12 this matter with your bank.We are pleased to learn that the goods we ordered are ready for dispatch, and hope you will let us know at

45、your earliest convenience the name or the carrying vessel and its sailing date.Yours sincerely Copy Right 343. L/C Amendment & ExtensionqIntroductionqSample LettersqUseful ExpressionsqHomework AssignmentCopy Right 353.1 IntroductionqReasons for L/C AmendmentqAttention to L/C AmendmentCopy Right

46、363.1.1 Reasons for L/C Amendment & ExtensionqDiscrepancies or some unforeseen special clauses to which the seller does not agree are found in the L/C;qAn unexpected situation with regard to supply, shipping, etc may arise.qSeller fails to get the goods ready for shipment in time or the buyer ma

47、y request that the shipment be postponed for one reason or another.Copy Right 373.1.2 Attention to L/C Amendment & ExtensionqLetters concerning L/C amendment and extension should be written with courtesy because a mere amendment to or extension of L/C will need time and money, which is always an

48、 annoying thing to the buyer.Copy Right 383.2 Sample LettersqLetter-01qLetter-02qLetter-03qLetter-04Copy Right 393.2.1 Letter-01(L/C Amendment)Dear Sir,Your letter of credit no. 8844 issued by the Bank of Cyprus has arrived. On examination. W find that transshipment and partial shipment are not allo

49、wed.As direct sailings to Limassol are infrequent,we have to ship via Rotterdam more often than not. As a result, transshipment may be necessary. With regard to partial shipment, it would speed matters up if we could ship immediately the goods wehave in stock instead of waiting for the whole shipmen

50、t to becompleted.With this in mind, I telexed you today, asking for the letter of credit to be amended to read:part shipment and transshipment allowed.Itrust this amendment will meet with your approval and you will telexus to that effect without delay.Yours Faithfully,Copy Right 403.2.2 Letter-02(Ex

51、tension)Dear Sir Thank you for your letter of credit coveing your order for 20 metric tons of Grade 1 beet. We regret to say that, owing to a delayon the part of our suppliers, we will not be able to get the shipment ready before the end of this month. We faxed you earlier today to that effect.We ex

52、pect that the consignment will be ready for shipment in the early part of August. We are arranging to ship it on the SS Blue Seas sailing from BRISBANE ON 7 August.We are lookingforward to receiving your faxed extension to the letter of creditso that we can effect shipment of the goods.We send our s

53、incere apologies for the delay and trust that it will not unduly inconvenienceyou.Your sincerely,Copy Right 413.2.3 Letter-04(P.177)Dear SirsL/C No/ NSW6180We confirm our cable of yesterday, reading as follows: L/C NSW6180 TIN1PLATE23ARRIVEN ONLY TADAY JULY SHIPMENT IMPOSSIBLE EXTEND SHIMENT VALIDATY 31/8 15/9 RESPECTIVELYWe trust that you have received the above cable and are doing what is necessary.As stipulated in S/C 89STX-5491, shipment could be made in July provided your L/C reached us not later than 15th. However, we received your L/C only yesterday and it is absolutely 15th fo