【商务英语课件】Unit-8-Terms-of-Payment

Unit8TermsofPaymentTeachingObjectives：Developageneralunderstandingofthedifferentmethodsofpayment;

Learnhowtomakepayment;

Masterthebasicwordandexpressionsabouttermsofpayment;

Writeabusinessletter.8.1Lead-in1.Workinpairstoworkoutasmanyfactorsareyoucanthatneedtobeconsideredinnegotiatingpaymentsforexportsales.

Forexample:

theimporter’spastandpresentbusinessrelationshipwiththeexporter

theimporter’spastpaymenthistoryandperceivedcreditworthiness____________________________________________________________________________

2.Thetermsofpaymentareanimportantpartofthesalescontract.Whenconsideringpayment,weneedtounderstanddifferentmodesofpaymentusedininternationaltrade.Nowstorethewordsandphrasesthatareassociatedwithmodesofpaymentandthenexplainordescribetheseterms.ModesofPayment

L/C3.Discussthefollowingquestionsinpairsorsmallgroups.1)Whatarethedifferencesinpaymentbetweendomestictradeandforeigntrade?2)Whatarethemaincontradictionsthatexistbetweensellersandbuyersininternationalpayment?3)Whatarebothsellersandbuyersconcernedaboutinnegotiatingpayment?

4)Whatarethecommonlyusedmethodsofpaymentininternationaltrade?Canyoutelltheadvantagesanddisadvantagesofeachforbothsellersandbuyers?8.2Speaking1.ConversationOneHavingsettledthepriceofthetransaction,Mr.GreenfromAmericaisdiscussingwithMr.Zhaoabouttermsofpayment.Green:Mr.Zhao,I’msogladwehavearrivedatacompleteagreementonprice.AndIcannotbutadmitthateverythinghasturnedoutsatisfactoryintheend.Nowthereremainsonlythequestionofpaymenttermstobediscussed.Zhao:That’sright,Mr.Green.Aftersomanyyearsofbusinessdealingswithus,youmustbewellacquaintedwithourusualpracticeinthisrespect.Inpointoffact,youknowthatwehavealwaysadheredtothetraditionalpaymentofconfirmedirrevocableletterofcreditpayablebyofsightdraft.Nexttocashinadvance,thisisthemostsecureformofpaymentforus.Green:IunderstandthattheL/Cprovidesbothpartiessomemeasureofsecurity,butothersupplierscangiveusmorefavorableterms.Yousee,theworldmarkethasbeenratherdullrecently.Besides,ourexchangequotaisratherlimited.SowewouldliketoaskyouformorefavorabletermslikeD/Aagainstpresentationoftimedraftorifyoucanentertainpaymentbytermdocumentarycredit.Zhao:Whatisyourproposednumberofdaysaftersightortermdocumentarycredit?Green:Willyouallowustoeffectpayment90daysafterpresentationofshippingdocumentstothebank?Zhao:Asyouknow,thisisreallyoutoftheordinarybusinesspracticeforthistypeofshipment.Ourcapitalwillbetiedupforseveralmonthsaftershipmenttoyou..Green:Pleaseletmeexplain.Becauseofthesizeofthisorder,wemaynotbeabletomakefullpaymenttilltheendofthefiscalyear.ThecurrenteconomicdownturnsintheUSandotherexistingfactorshavedrainedourcashflowtothelimit.Weexpecttobeoperatingonfullcapacitybyyear-end.Wewouldliketoaskyouforaspecialfavorjustthisonetime.Zhao:Givenourlongstandingrelationshipandyouroutstandingcreditrecord,wemaybeabletoextendamorefavorabletermofpaymenttoyou.Letmemakeaquickphonecalltoourmanagertodiscussouroptions.Zhao:Mr.Green,giventhespecialcircumstanceofthistransaction,we’llagreetoacceptD/Patsightforhalfthetotalpayment.Wewillapproveat90daysdeferredpaymentcreditafterpresentationofshippingdocumentsfortheremainingbalance.Aletterofinstructionswillbegiventothebank.Pleaseunderstandthatwecanonlymakethisconcessionunderthisveryrarecircumstance,butthisshouldnotbetakenasaprecedent.Green:Thankyouforyourcooperation,Mr.Zhao.Youdon’tknowhowmuchthismeanstomeYoumayrestassuredthatthedocumentswillbecheckedanddulyhonoredonsight.Zhao:Itrustyouandhopeyou’llliveuptoyourcredit.

AfterZhao’sphonecalltohismanager,hereturnstotheroom.2.ConversationTwoHavingsettledtheproblemsofprice,qualityandquantity,Mr.StoneandMr.Zhouarecontinuingtheirtalkaboutthetermsofpayment.Stone:Verywell,itseemsthatwehavesettledeverythinginconnectionwiththistransaction,exceptthepaymentterms.Mr.Zhou,whatisthemodeofpaymentyouusuallyaccept?Zhou:Well,confirmed,irrevocableletterofcreditpayableagainstshipingdocumentsistheonlymodeweaccept.Stone:Isee.CouldyoumakeanexceptionandacceptD/P?Zhou:Iamsorry.Butourrulesdon’tallowustoacceptotherpaymenttermsexceptL/C,althoughyouhavehadtwodealswithusbefore.Stone:Whynot?Youknow,payingbyletterofcreditisreallytroublesomeandcostsusalot.Whenweopenaletterofcreditwithabank,wehavetopayalargesumofmoneyasadeposit.Thatwilltieupourcapital.Zhou:Well,Mr.Stone,youmustbeawarethataconfirmedandirrevocableletterofcreditallowsexporterstheadditionalprotectionofthebanker’sguarantee.WealwaysrequireL/Cforourexports.Andtheotherwayround,wepaybyL/Cforourimportsandfurthermore,wepaythesamekindofletterofcreditwhenweimportfromyourcountry.Stone:Let’smeeteachotherhalfway.Whatdoyousayto50%byL/CandthebalancebyD/P?Zhou:I’msorry,Mr.Stone.AsIsaid,Ican’tacceptotherpaymenttermsthistimeexceptL/C.I’llconsiderD/Ptermsatapropertimeinthefuture.Stone:Well.ItseemsthatIhavetoagreeonit.Butisitatsightoraftersight?Zhou:Itisatsight.SolongasthedocumentsareinfullconformitywiththeL/C,youarerequiredtopayfortheshipmentimmediatelyafteryoureceiveallthenecessaryshippingdocuments.Stone:Mr.Zhou,youknowthatopeningaletterofcreditwillcostusalotofmoney.EventhatI’veagreedtopayingbyL/C,couldyoumakealittleconcession?Zhou:What’syouridea?Stone:PaymentbyL/Cat60dayssightismyproposal.Ihopeyouwillacceptit.Zhou:Aha!Youareanexcellentbusinessmanandverygoodatbargaining.IthinkIhavenowaybutconsent.Stone:Thankyou.White:Now,Mr.Zhang,whendoIhavetoopenthecoveringL/CifIwantthegoodsdeliveredinJune?Zhang:Generally,theL/Cshouldbeopenedbythebuyer30daysbeforedeliverysothatthesellercanmakethenecessaryarrangements.Therefore,you’llhavetoopentheL/CearlyinMay,thatis,about30daysbeforethetimeofshipment.Otherwisewe’dbebehindthesailingschedule.White:Butitaddstomyfinancialdifficulties,youknow.Toopenaletterofcreditwithabank,Ihavetopayalotofmoneyforthebankchargesaswellasadeposit.AndtoopentheL/C30daysbeforethemonthofshipmentpracticallymeansIcannotgetbackmydeposituntilafterthreeorfourmonths.That’lltieupmycapitalinthebankfortoolong.Isimplycouldn’taffordit.Won’t15or20daysbeenough?3.ConversationThree

Aftertheyhavereachedanagreementonthetermsofpayment,Mr.WhiteandMr.ZhangaretalkingaboutwhenthecoveringL/Cshouldbeopened.Zhang:I’mafraid15or20dayswon’tdo.Gettingthegoodsready,bokingtheshippingspaceandwhatelse,allthesetaketime.Youcan’texpectustomakedeliveryinlessthan30days.White:Ifthereisnootherchoice,letitbe30daysthen.IthinkI’llhavetoarrangefortheL/CtobeissuedassoonasIgethome.Zhang:Whenwillitbe?White:Earlynextweek,ifnothinggoeswrong.Inthemeantime,I’dlikeyoutoexertyourselfandgeteverythingreadyforshipment.Zhang:Youmayrestassuredofit.We’llsetaboutbookingtheshippingspaceimmediatelyanddoeverythingwithoutfailtoeffectshipmentwithinthetimestipulatedinthecontract.White:That’llbefine.Oh,onemorething.HowlongshouldyourL/Cbevalid?Zhang:Thatcangoaccordingtoconventions.Sinceyouarepayingbya30-dayL/C,let’ssaytheL/Cexpires15daysafterthe30-daydurationisdue.Thatistosay,whenyouopentheL/C,pleaseseethattheL/Cremainsvaliduntilthefifteenthdayafterdateofshipment.Yousee,youmustleaveusatleastoneweek’stimeorsotogetallmyshippingdocumentsreadyforpresentationandnegotiation.White:Right.We’llopentheL/Caccordingtoyourrequirementwithinthedesignatedtime.Zhang:Thankyou.White:Bytheway,Mr.Zhang,couldyoutellmewhatdocumentsyou’llprovide?Zhang:Togetherwiththedraft,we’llsendyouacompletesetofbillsoflading,acommercialinvoice,anexportlicense,aninsurancepolicy,acertificateoforiginandcertificateofinspection.That’sall.White:That’sgood,thanks.8.3ReadingPre-readingquestionsforpairwork.1)Whichmethodofpaymentwouldyouchooseforinternationaltransactions?Why?2)Whatkindofservicescanabankeroffertoyouininternationaltransactions?Howdotheyhelpyou?3)Whatdoyouthinkarethemainrisksthatareinvolvedininternationaltradepaymentforbothanexporterandabanker?

FraudInvolvedinInternationalTradeFinance:ABanker’sPerspective

Traditionally,internationaltradehasalwaysbeenconsidered“lowrisk”,andthisisattributedtothefour“Ss”.Comparedwithotherformsofbanklending,financingtradetransactionsispopularbecausethesedealsare:

Shortterm

Self-liquidating(e.gbanksfinancetheimportofgoodswhicharethenresoldtorepaythebank)

Secured(bytheunderlyinggoods)

Speedilycompleted(e.g.withintheshortlifeofadocumentarycredit,theremaybeseveraltransactionswhicharecompletedquickly,at“highvelocity”)Nevertheless,therearethreemainareasofrisk—microrisks,macrorisks,andproductrisks.Microrisksareencounteredattheindividualcustomerlevelandareconfinedtothefinancial(credit)andoperationalrisksassociatedwiththeirbusiness.Macroriskscanbedefinedasthoseexternalfactorswhichhaveatendencytoimpactadverselyonacustomer’sinternationaltradebusiness.Someofthemorefrequentproblemsintradefinancingarecausedbyalackofappreciationofcountryrisk,foreignexchangerisk,industryrisk,bankriskandfraud.Herewewilldiscusssomefraudinmoredetailandsuggestsomewaystocounteractthem.

Tocoverthevariousaspectsofmaritimeandindeedanyothertypeoftradefraudrequiresvolumesofpaper.Therearevarioustypesoffraudlikedocumentaryfraud,counterpartfraud,insuranceseams,cargotheft,scuttlingandpiracy.Unfortunately,therearesomecountrieswhicharerenownedforharboringfraudsters.Thegoldenruleis“ifthedeallookstoogoodtobetrue,itprobablyis”andoneshouldbecautiouswhendealingwithtransactionswhicharemuchlargerinvaluethanthenorm.Forgeddocumentarycreditsarealwaysincirculationandfortunately,anexperiencedtradeservicesofficercandetectafalsecreditmoreoftenthannot.Ifgoodsarereleasedagainstanundertakingbytheimportertopayinthefuture—usuallybyacceptingadraft—thentheexporter/financingbanklosescontroloverthegoodsandthismethodofreleasetermedD/A(documentsagainstacceptance)ismoreriskythanD/P.Herewewillconsiderthebankintworoles:(1)astheinstitutionfinancingtheimporter,and(2)astheexporter’sbanks.1.ImportsunderDocumentaryCredit(DC).BeforeundertakingtoestablishaDCforanimporter,thebankshouldconsider:Thefinancialstandingoftheimporter.ThebankhastolooktotheimportertopaytheimportbilldrawnundertheDCandthereforeshouldbesurethatthelatterhasorwillhavethefundstopay.Thegoods.Tradefinanceissupposedtobeself-liquidatingandthegoodsmustbereadilysaleable.Considerationshouldalsobegiventotherisksassociatedwithperishabilityofthegoods,possibleobsolescence,importregulations,packingandstorage,etc.DocumentaryCredits

Thestatusoftheexporter(orbeneficiaryoftheDC).Thereisalwaystheriskthatanarrantexportercouldshipsubstandardgoodsor,worsestill,completerubbish,andonealwaysguardsagainstthisbyfindingoutasmuchpossibleabouttheexporterusingstatusreportsandotherconfidentialinformationfrombanksandcreditratingagenciessuchasDun&Bradstreet.ItisalwayswisetorequestareliablethirdpartylikeSGS(afirmofinternationalcargoinspectors)toinspectthegoodspriortoshipmentandproduceareportcalledaninspectioncertificate.SuchadocumentisoftencalledforunderaDC.Therehasbeenmanyaninstancewheretheexporterhasshippedrubbishandstillproducedacompliantsetofdocuments.UndertheUniformCustomandPracticeforDocumentaryCredits(UCP),ICCpublicationNo.600,allpartiesdealindocumentsandatenderofcompliantdocumentstotheissuingbankmeansthatthebankwillhavetopay.Theonlyredressthatisavailabletotheimporterisifhecanconclusivelyprovefraudandgetthecourtstoissueaninjunctionrestrainingthebankfrommakingpayment.2.ExportsunderDC.OneofthegreatestservicesabankcandoforitsexporterinadvisingtheDCitreceivesfromanoverseasbankistocheckcarefullywhetheritisworkable,andthattheexporterwillbeabletocomplywithitstermsandconditions.ThisiscalledcheckingtheworkabilityofaDCandveryoftenoneencountersexportersfindingthattheycannotproduceacompletesetofdocumentsundertheDC.PaymentisthusdelayedduetodiscrepanciesbetweenthedocumentsandtheDCor,worsestill,notforthcomingatall.Manyexporterssubmitdocumentstotheirbankandrequestthatthebanknegotiatethedocuments,i.e.theywantthebanktogivevalueforthedocumentspriortoreimbursementbytheissuingbank.Providedbankriskandcountryriskconsiderationshavebeendealtwith,theexporter’sbank—nowtermedthenegotiatingbank—willhavetocheckthedocumentscarefullyagainsttheDCandiftheyareinorder,i.e.nodiscrepancies,thebankwilldiscounttheexportbill.Thedocumentsarethensenttotheissuingbank,whichwillcheckthedocumentsandthenreimbursethenegotiatingbank.Iftheissuingbankfindsdiscrepanciesoverlookedbythenegotiatingbank,theywillrejectthedocumentsandiftheapplicantisalsounwillingtotakeupthedocuments,thenegotiatingbankwillhavetoturntotheexporterforreimbursement—usuallynotaneasytaskastheexportermayhavealreadyusedthefundsinothertradingactivities.Thesituationismoreseriousifthenegotiatingbankisalsotheconfirmingbank.Here,thenegotiatingbanktakesonthesameliabilitiesandresponsibilitiesoftheissuingbankandthereforehasnorecoursetotheexporter.

Tomitigatetheaboverisksofnon-payment,thenegotiatingbankmustunderstandtheunderlyingtransactionandbecomfortablethatthetradingpartieswillhonortheircommitments.Verysimplytheimporterwantsthegoodsandtheexporterwantstobepaidintime.NoDC,howeverworded,willpreventtheactionsofafraudster.Theoperationalcompetencyandintegrityoftheissuingbankmustbeconsideredcarefully,sinceitcanbeverytryingdealingwithbanksthathabituallyrejectadocumentanddelaypaymentsduetotrivialdiscrepancies.

Themyriadofsituationsthatoneencounterswhenfinancinginternationaltradedefiesthewritingofanyonepublicationcoveringallproblems.Likeanyotherformofcommercialbankingthereisnosubstituteforgoodoldcommonsense.

Answerthefollowingquestions:1)Whyhаѕіntеrnаtіоnаltradeаlwауѕbееnсоnѕіdеrеd“lowrіѕk”bybanks?2)Whatkindofrisksdoesabankfaceinfinancinginternationaltransactions?3)Toavoidfraud,whatshouldalendingbankertotheimporterconsider?4)WhatisoneofthegreatestservicesabankcandoforitsexporterinadvisingtheDCitreceivesfromanoverseasbank?5)Howdoesthisarticleenlightenyouasanimporter/exporter?8.4WritingLettersofCredit

1.AmendmentstoLettersofCredit.Ifpaymentofexporttradeismadebyletterofcredit,theseller,onreceivingtherelevantL/C,shouldfirstofallmakeathoroughexaminationtoseewhethertheclausessetintheL/CareinfullconformitywiththetermsstatedintheS/Corwhenthereisaneedtomodifythestipulationsofthecreditorthewordinginthecredit,forexample,typographicalerrorwhichmayaffecttheexportationandimportationofthegoods.Aminordifferencebetweenthetwo,ifnotdiscoveredordulyamended,maycausethesellermuchinconveniencebecausethenegotiatingbankwillrefusenegotiationofthedocumentsaccordingtotheinstructionsgivenbytheopeningbank.Therefore,ifanydiscrepanciesorsomeunforeseenspecialclausestowhichthesellerdoesnotagreearefoundintheL/C,thesellershouldsendanadvicetothebuyer,askinghimtomakeamendments.Sometimesanunexpectedsituationregardingsupply,shipping,etc.mayarise.Inthiscase,anamendmenttotheoriginalL/Cwillalsoberequired.2.CheckingtheL/C.WhencheckingtheL/C,thesellerneedstofocusonthefollowingprovisions:

Theshipmentdate

ThetimeofvalidityoftheL/C

Thequantityofthegoodsandamountofpayment

Theaddressofthebeneficiary

Thepriceterms,theloadingandunloadingport

Insuranceclause

ThepackingclauseThedescriptionofthegoods3.WhatmaycausethedelayinopeninganL/C?

Thebuyerdoesn’thavesufficientdepositinitsissuingbanktoopentheL/C

ThebuyeristoobusytoarrangetheL/Cproceduresasapriority

ThemarketsituationhaschangedTheissuanceoftheL/Cisneglectedinthebuyer’scompanyowingtoproblemsincoordinationamongdifferentdepartmentsconcerned

…4.WhatcanyoudothenifthebuyerfailstoopentherelativeL/Cintime?It’sausualpracticeininternationaltradethattheL/CistobereceivedbytheselleronemonthbeforethedateofshipmentsothatthesellerisabletomakepreparationsforproductionandshippingdocumentswithinthetimelimitstipulatedintheL/C.5.Forthesellertochangethetermsnotedonanirrevocableletterofcredit,itmustrequestanamendmentfromthebuyer.Theamendmentprocessisasfollows:1)Thesellerrequestsamodificationoramendmentofquestionabletermsintheletterofcredit;2)Ifthebuyerandissuingbankagreetothechanges,theissuingbankwillchangetheletterofcredit;3)Thebuyer'sissuingbanknotifiestheseller'sadvisingbankoftheamendment;4)Theseller'sadvisingbanknotifiestheselleroftheamendment.6.ForaletteraskingforL/Camendment,expressthankstotheothersidefortheopeningoftheL/C.ItisquitenecessarytogiveexplanationsfortherequestfortheL/Camendmentasitmaycosttheimporterasumofmoneyandsometrouble.Thefollowingpointsshouldbementioned:

CitetheL/Creferencenumberandorderinformation

Sayexplicitlytheword“amend”or“amendment”toshowyourpurposeofthisletter

Explainthereasonfortheamendment

Providetheothersidewithcorrectcontents

TelltheothersidetheexpecteddateordeadlineforreceivingtheL/Camendment

ThanktheothersideforcooperationandexpectthepromptamendmentoftheL/CSampleLetter1DearSirs,ThankyouverymuchforyourletterofthefirstMay,2021informingusoftheestablishmentofyourL/CNo.H-1022againstourS/CNo.ZF110103.TheL/Cinquestionhasjustcometohand.However,uponchecking,weregrettohavefoundthattherearecertainclauseswhichdonotconformtothoseofthecontract.Herebywelistthefollowingdiscrepanciesforyourattention:1.Theamountofthecreditshouldbe$152000(SayUSDollarsonehundredandfifty-twothousandonly)insteadofUS$125000.2.TheB/Lshouldbemarked“freightprepaid”insteadof“freighttocollect”.3.ThecreditshouldexpireonJuly15,2011fornegotiationinChinainsteadofJune30,2021.Wehopeyouwillmakethenecessaryamendmentsasearlyaspossiblesoastofacilitateourshippingarrangement.Yourpromptattentiontotheabovewillbehighlyappreciated.

Yoursfaithfully,xxxxxxSampleLetter2DearSirs,ThankyouforyourirrevocableL/CopenedthroughBankofChinafor10casesofbottledmedicine.AccordingtothestipulationsoftheL/C,thetotalquantityshouldbeshippednotlaterthanFebruary10.Althoughwehavebeenmakinggreateffortstobookshippingontime,muchtoourregret,weweretoldbytheshippingcompaniescontractedthattherewouldbenoshippingcontainerbeforeJanuary24.Therefore,weherebyrequestyoutohaveboththedateofshipmentandvalidityoftheL/CextendednotlaterthanFebruary15and30respectively.Sincethisisanurgentmatter,pleaseamendtheL/Cimmediately.Yourcompliancewithourrequestwillbehighlyappreciated.Yourstruly,xxxxxxWritingPractice

WritealetteraskingforamendmentstothefollowingL/Cbycheckingitwiththegivencontractterms.COMMERCIALBANKOFTHATTOWN

Date:May15,2011To:ZhejiangFoodstuffsImport&ExportCorporation,Hangzhou,ChinaAdvisedthroughBankofChina,ZhejiangNo.BOC2011/5/15

DOCUMENTARYLETTEROFCREDITIRREVOCABLEDearSirs:YouareauthorizedtodrawonHongKongFoodCompany,VancouverforasumnotexceedingCAN$120,000(SAYCANADIANDOLLARSONEHUNDEREDANDTWENTYTHOUSANDONLY)availablebydraftdrawnonthematsightaccompaniedbythefollowingdocuments:

FullsetofCleanonBoardBillsofLadingmadeouttoorderandblankendorsed,marked“freighttocollect”datednotlaterthanJune30,2021andnotifyaccountee

SignedCommercialInvoiceinquintuplicate

CanadianCustomsInvoiceinquintuplicate

InsurancePolicy(orCertificate)induplicatecoveringAllRisksandWarRisksEvidencingshipmentfromChinaporttoMontreal,Canadaofthefollowinggoods:50,000tinsof430gramsofMeiLinBrandStrawberryJam,atCAN$2.50pertinCIFC3%Vancouver,detailsasperyourS/CNo.2021/0317.Partialshipmentsareallowed.Transshipmentisnotallowed.ThiscreditexpiresonJune30,2021fornegotiationinChina.…….SalesConfirmationNo.2021/0317TheSeller:ZhejiangFoodstuffsImport&ExportCorporation,Hangzhou,ChinaTheBuyer:HongKongFoodCompany,VancouverNameofCommodity:

MeiLinBrandStrawberryJamSpecifications:340gramspertinUnitprice&Terms:CAN$2.50pertinCIFC3%VancouverTotalAmount:CAN$125,000Shipment:InJune,2021fromChinaporttoVancouver.PartialshipmentsandtransshipmentareallowedPayment:By100%confirmed&irrevocableL/Ctobeavailablebysightdraft,reachingtheseller30daysbeforethemonthofshipment,remainingvalidfornegotiationinChinaforanother21daysaftertheprescribedtimeofshipmentInsurance:Tobeeffectedbythesellerat110%ofinvoicevaluecoveringWPA&WarRisksasperC.I.C8.5Roleplay1)Mr.DavidChen,aforeigntradetraineeinyourcompany,nowworksinyouroffice.Heisrathereagertolearnandasksyoutotellhimhowpaymentismadeinforeigntrade.Nowyoutellhimaboutthemainmodesofpaymentininternationaltradebusiness.Youneedtoexplainthedifferencesbetweenthem,forexample,thedifferencesbetweenD/PandD/A.Youmaystoptoaskforhisunderstandingduringtheexplanation.2)AbusinessmanfromAustraliawantstobuyfromyou500setsofsewingmachinesandheintendstomakethepaymentbyD/A.Yourefusehimwithgoodreasons.Afterdiscussionyouarepreparedtoacceptpaymentof50%byL/CandthebalancebyD/Patsight.3)Mr.Smith,aBritishimporter,istalkingwithyou,salesmanagerofaChineseexportcompany,aboutthetermsofpayment.Nowdiscussitwithhimwiththehelpofthefollowinghints.Mr.Smith:

Askaboutyourusualpaymentterms

Suggestpaymentbycollectionandgivereasons

AgreetoL/Cpaymentbutaskforanearlydeliveryofthegoods

Acceptyourproposalandemphasizetimelyshipmentoftheremaining70%

AgreeandexpressgoodwishesYou:

StatepaymentbyL/Cisyourusualpractice

InsistonpaymentbyL/Candgivereasons

Statedifficultyinadvancingtheshipmentinwholelotbutpromisetoship30%inadvance

Askforconfirmed,irrevocableL/Cwithpartialshipmentallowed

Promisetomaketimelyarrangements

8.6LanguageFocus1.Askingabouttermsofpayment.1)Wouldyoupleasetellusthetermsofpayment?2)Wouldyouexplainspecificallyyourpropositionaboutthetermsofpayment?3)Whataboutthetermsofpayment?4)Whatisthemodeofpaymentyouusuallyaccept?5)Whatisyourpropositionontermsofpayment?6)Whatisyourregularpracticeabouttermsofpayment?7)Howarewegoingtoarrangepayment?8)Howshallwepayforthis?9)Shallwediscussthemodeofpayment?10)Shallwecometothetermsofpayment?11)Nowlet’sdiscussthequestionofpaymentterms.2.DemandingpaymentbyL/C.1)Confirmed,irrevocableL/Cpayableagainstshippingdocumentsistheonlymodeweaccept.2)Werequirepaymentbyirrevocableletterofcreditavailablebydraftatsight.3)Asforpaymentterms,weusuallyrequireconfirmedandirrevocableL/C.4)WeinsistonpaymentbyL/C.5)L/Catsightiswhatwerequireforallourcustomers.6)WeaskforpaymentbyanirrevocableL/Cpayableagainstshippingdocuments.7)We’dlikeyoutopayusbyconfirmed,irrevocableletterofcredit.8)WewouldliketodobusinessonthebasisofsightL/C.9)WefinditnecessarytohandleourbusinessonL/Cbasis.10)I’msorrytosaytheonlytermsofpaymentwecanacceptis100%irrevocabledocumentaryL/C.11)Regardingtermsofpayment,wewouldliketopointoutthatL/Cistheusualpracticewithallourcustomersinyourc