《商務(wù)英語函電教程》Unit 8付款條款

1、Unit EightTerms of paymentLearning ObjectivesTo identify different payment termsTo grasp the writing skill in urging an establishment of Letter of creditTo know how to ask the buyer to amend a L/CGeneral View Compared with payment arrangements for domestic transactions, payments for international tr

2、ansactions are more complicated and difficult for a number of reasons. First, the arrangements are international; as a result, longer distance and more procedures are involved. Second, longer time is needed in setting an international payment. General View Third, different regulations and systems of

3、 law that are applied further complicate the arrangements. Fourth, the monetary and financial matters are different in different countries and different methods are used. Because of the above reasons, international payment arrangements involve more risks and must be handled with special care.General

4、 View1.Payment Instrument of International Trade1)Draft or Bill of Exchange2)Promissory Note3)Check 2. Modes of payment in international trade1）Remittance2）Collection3）Documentary creditGeneral View1、Payment Instrument of International Trade 1) Draft or Bill of Exchange A draft of bill of exchange i

5、s an unconditional order in writing signed by one party (drawer) requesting a second party (drawee/payer) to make payment in lawful money immediately or at a determined future time to a third pay (payee). In the context of international trade, the drawer and payee is usually the seller and the drawe

6、e and payer is usually the buyer.General View 2) Promissory Note A promissory note is an unconditional promise in writing made by one person( the maker) to another (the payee/ the holder) signed by the maker engaging to pay on demand or at a fixed or determinable future time a sum of money to or to

7、the order of a specified person or to bearer. A promissory note can be issued by a person, a firm, or a bank. But promissory notes issued by individuals and firms are not widely used in trade today.General View 3) Check A check is an unconditional order in writing addressed by the customer (drawee)

8、to a bank(draw) signed by the customer authorizing the bank to pay on demanding a specified sum of money to or to the order of a named person or to bearer (payee). A check is a special kind of draft in that the drawee is always a bank with which the drawer has an account. Besides, a check is always

9、paid upon presentation. If the drawer wants to write a check now but does not want the payee to collect the money immediately, the drawer can postdate the check.General View2、Modes of payment in international trade 1）Remittance Remittance means that the importer remits the amount of money to the exp

10、orter through banks according to the terms and time stipulated in the contract. There are kinds of remittance: Mail Transfer (M/T) Telegraphic Transfer (T/T) Demand Draft (D/D)General View 2）Collection It is a kind of commercial credit, means the presentation for payment of an obligation and the pay

11、ment thereof. By collection, it is the exporter who draws a bill of exchange on the importer for the sum due, with or without relevant shipping documents attached, and asks his bank to arrange for the acceptance or payment of the bill overseas. The bank will carry out his instructions through it bra

12、nch or a correspondent bank in the importers place. To be specific, in collection, payment is made through banks under the terms of Documents against Payment (D/P) or Documents against Acceptance (D/A). General Viewu D/P (D/P at sight and D/P after sight) D/A D/P means documents can only be released

13、 to the importer when he has paid the amount on the draft. D/P at sight means that payment should be made as soon as the importer is presented the draft. D/P after sight requires the collecting bank to release the documents upon payment. D/A is different from D/P in that the documents will be releas

14、ed to the importer once the importer has accepted the draft. General View 3) Documentary credit a documentary credit is a written undertaking by a bank given to the exporter at the request of the importer to effect payment up to a stated sum of money, within a prescribed time limit and against stipu

15、lated documents.The most newly developed payment procedure for passing and recording international payment is called the Society for Worldwide Inter-bank Financial Telecommunication (SWIFT). This system is known for its uniform format, fast transfer and low cost.Specimen Letter of Credit THE CHARTER

16、ED BANK SingaporeIrrevocable L/C No.94625 Date: May15, 2008To: China National Import & Export Corp.,Shanghai BranchDear Sirs，You are hereby authorized to draw on Hua Feng Trading Co., Singapore for a sum not exceeding USD 7,850.00 CIF (Say US Dollars Seven Thousand Eight Hundred and Fifty only)

17、available by your draft, drawn in duplicate, on them at sight, accompany 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 induplicate covering

18、 WPA & War for full invoice value plus 10%.Evidencing shipment from Shanghai to Singapore of the following merchandise:500 dozen T-shirts as per S/C.1023 dated June 15, 2008. Condition of shipment:1) Transhipment is prohibited;2) Partial shipments are permitted.This credit expires on August 18,

19、2008 and is subject to the Uniform Customs & Practice for Documentary Credits International Chamber of Commerce No.600. Yours sincerely, THE CHARTERED BANK Singapore Chief AccountantGuidelines for Writing1. Letter of payment Steps in writing a payment letter are:1) Mention the contract, goods, e

20、tc;2) Suggesting the term of payment and the reason;3) Wishing the reader accept. Steps in replying to such request are:1) Stating that you have received their letters;2) Giving your reply of agreeing or refusing with reasons; 3) Stating your good will and your wish to do business with the reader. S

21、pecimen Letter-1 (Request for Payment by D/A) Al-Rayes Group Companies P. O. Box 26460 Safat, Kuwait E-mail: al-Your ref: PD/0001 Our ref: AMD/IP September 1，2007F & M Co., Ltd.14 rue Legrand 8000 AmiensFranceDear Sirs,We are the largest supermarket in Kuwait and have recently received a number

22、of enquires for your perfumes. We think there are good prospects for the sale of this product, but at the present it is little known here for your brand. As we cannot count on regular sales, we do not feel able to make purchases at our own expenses.We are therefore writing to suggest that you send u

23、s a trial delivery for sale on D/A terms. We make the proposal hoping to place firm orders when the market is established.We believe our proposal offers good business opportunities and hope you will be willing to accept. Yours sincerely, Black Smith Specimen Letter-2 ( Proposal payment by D/P instea

24、d of D/A)F & M Co., Ltd. 14 rue Legrand 8000 Amiens, FranceTel: 33-1-50458976 E-mail: fm- November 12, 2007Al-Rayes Group CompaniesP. O. Box 26460Safat, KuwaitDear Mr. Smith,Thank you for letter of November 1, proposing payment by D/A for a trial order of perfumes, we have carefully studied your

25、 proposal and regret that we cannot accept it.As our usual practice goes, we require payment byconfirmed and irrevocable documentary letter of credit. However, in consideration of our friendly relations, we are, as an exceptional case, prepared to accept D/P at sight terms.We sincerely hope you will

26、 agree with us on this matter so that we can get the first transaction concluded. Yours faithfully, Ding Ping Specimen Letter-3 （Request the seller to accept payment by D/P）November 8, 2007Dear Sirs, Re: Order for Soy beanWe would like to place a trial order of 50 metric tons of Soy bean (2006 Crop)

27、, at the price quoted in your offer which reached us on July 8, 2006. As for the terms of payment, would you please give us some special treatment to pay by D/P instead of Confirmed Irrevocable L/C as required in your offer. Because issuing an L/C will tie-up our capital and increase the cost, leavi

28、ng us a much narrower profit margin.We would be most grateful if you could extend this favor to us. You can be rest assured that once we receive the shipping document for the captioned gods we will pay immediately the full amount of the purchase. This is just an initial order. If the transaction goe

29、s on well, large orders will follow. We are looking forward to your favorable reply. Yours faithfully, BenzSpecimen Letter-4 (Refusing buyers request of payment by D/P, but easing the term of payment)November12, 2007Dear Sirs,We have received with thanks your order of November 8 for 50 sets of U.S.

30、Dollar Bank Note Checker. Because we have kept it as a rule that payment exceeding USD1500 must be made by L/C, we cannot accept your proposal by D/P.However, we shall give you a more favorable term L/C at 60 day sight instead of L/C at sight, which is the best term weve ever offered. Our products a

31、re very popular in many countries for the advantage of its high efficiency and reasonable price. Please confirm your order soon so that you and your customer will enjoy the fine quality and reliable after-sale service of our products at an early date. Yours sincerely, Curry DavidGuidelines for Writi

32、ng 2. Urging Establishment of Letter of Credit In writing a letter urging the establishment of L/C, the following steps should be considered: (1). Mention the contract number or order number and the time of shipment as well in the first letter, write a gentle reminder that the importer may be too bu

33、sy to remember the time, or the L/C may be on the way to the exporter.Guidelines for Writing (2). Show regret of receiving no reply and remind the importer of opening the covering L/C on time in the second letter. Stress the goods are ready for shipment. (3). Write a strong request to the importer t

34、o open the L/C without any delay when the L/C is still not available after repeated reminders. Set the deadline and inform the importer of any serious consequence.Specimen Letter-5 （Asking for timely establishment of L/C） August 16, 2007Dear Mr. Brown,Our Sales Confirmation No. W15With reference to

35、the 5,000 dozen Shirts under our Sales Confirmation No.W15, we wish to draw your attention to the fact that the date of delivery is approaching, while the covering L/C has not come to us. Please do your utmost to expedite same, so that your order can be executed smoothly.In order to avoid subsequent

36、ly amendments, please see to it that the L/C stipulations are in exact accordance with the terms of the Sales Confirmation.You may rest assured that our shipment will meet your requirements in every respect. Yours faithfully, Albert Zhou Specimen E-mail-1 (Urging establishment of L/C after time limi

37、t)Sender: Receiver: Attention: Mr. Peter BrownCC: Marie StevensonSubject : Our Sales Confirmation No. W15Date: Wednesday 22 August, 2007 15: 01: 16-0400Much to our regret, we have not yet received your confirmed and irrevocable letter of credit against our SalesConfirmation No.W15, though it should

38、have reached us by the end of August 2007, as stipulated.While requesting you to expedite the establishment of your L/C, we have to ask for a corresponding extension of the time of shipment, which is necessary due to your delay in opening the credit. Yours truly, Nancy Yuan Specimen E-mail-2 (A stro

39、ng request for the importer to open an L/C)Sender: Receiver: CC: Marie StevensonSubject : Our Sales Confirmation No. W15Date: 27August, 2007 12: 45: 16-04002Dear Mr. Brown,Referring to the captioned order and our E-mail on August 22, requesting you to establish the relevant L/C, we have not received

40、 you L/C nor your explanation for the delay up to now.Would you please give your attention to item 5 in the above Sales Confirmation which reads “The Buyer shall establish the covering Letter of Credit before 30th August, 2007, failing which the seller reserves the right to rescind the contract with

41、out further notice.”It is understood that both of us must observe and execute the contract once we have signed it. We have already prepared for shipment according to the Sales Confirmation. The goods you ordered have been ready for some time, and demand has been great recently. It is hard to keep th

42、egoods for you any longer. However, in viewing of the friendly business relations between us, we shall wait for your L/C, which must reach us no later than September 10, 2007. If, by then, we fail to receive your L/C, we shall cancel our Sales Confirmation and ask you to refund to us the storage cha

43、rges we have paid on your behalf.Please attend to this matter with all speed. Yours Sincerely, Albert Zhou Guidelines for Writing3. Amendment to Letter of CreditLetters of credit are varied in form, language and stipulations. Generally speaking, they include the following contents：1)The number of th

44、e credit and the place and time of is establishment.2)The type of the credit.3)The contract on which it is based.4)The major parties relevant to the credit, such as the applicant, opening bank, beneficiary, advising bank, etc. 5)The amount or value of the credit. 6)The place and date on which the cr

45、edit expires. 7) The description of the goods including name of commodity,Guidelines for Writing quantity, specifications, packing, unit price, price terms, etc.8) Transportation clause including the port of shipment, the port of destination, the time of shipment, whether allowing partial shipment o

46、r transshipment. 9) Stipulations relating to the draft.10)Stipulations concerning the shipping documents required.11)Certain special clauses if any, e.g. restrictions on the carrying vessel and the route. 12)Instructions to the negotiating bank. 13)The seal or signature of the opening bank. 14) Whet

47、her the credit follows “the uniform customs and practice for documentary credits”Guidelines for WritingPay Attention:Every L/C, as well as the date of shipment, has its expiry date. The date of shipment and the expiry date of the L/C should be made at least two weeks apart. If something unexpected o

48、ccurs, the seller will have to ask for extension of the validity of the L/C and the date of shipment.Since the buyer will spend time and bear the cost to apply to the issuing bank for any amendments in the L/C, the seller should write with courtesy and in a positive tone when asking for the amendmen

49、ts. Guidelines for WritingThe following points should be considered in letters concerning the L/C amendments: 1. L/C number or Contract Number or Order number should always be labeled as subject. 2. An expression of thanks for the establishment of the covering letter of credit. 3. Reason for inabili

50、ty to accept the clause or clauses in the letter of credit. 4. Explanation for how the amendment is to be made. 5. An expression of the goods will be delivered promptly on receipt of the L/C amendment.Specimen E-mail-3 (Discrepancies between credit and contract)Sender: Receiver: Subject : Your L/C N

51、o. 35730-11 Date: September 10, 2007 16: 45: 16-04051Dear Mr. Peter Brown, Thank you for your L/C No. 35730-11, but we regret to say that we have found there are certain points which do not agree with the terms of our Sales Confirmation No. W15. Please amend the L/C as follows:1) The amount both in

52、figures and in words should respectively be USD30,000 and Say US Dollars Thirty Thousand Only.2) Draft to be at sight instead of at 45 days after sight.3) “FOB Shanghai” should read “CIF New York”.4) The port of shipment should be Shanghai instead of Lianyungang.5) The date and place of expiry shoul

53、d read: May 15, 2008 in Shanghai, China.Please make amendments as soon as possible so that we can deliver the goods in good time. Yours sincerely, Li Wei Specimen E-mail-4 （Shortage in credit amount）Sender: Receiver: .jp Subject : Your L/C No. 098967 Date: May 8, 2008 11: 45: 16-04051Dear Sirs,We ha

54、ve received with thanks the captioned L/C for the amount of $2,500 covering your Order No. 121 for 8 metric ton walnut-meat. It appears that the amount in your L/C is insufficient, as the correct total CIF value of your order comes to $2,960 instead of $2,500, the difference being $460. In view of t

55、he above, please increase the amount of your L/C by $460. On receipt of your amendment we shall arrange shipment without fail.Yours sincerely,Henry Specimen E-mail-5（Insisting on Transshipment and partial shipment）Sender: Receiver: Subject : Your L/C No. BW4786 Date: May 17, 2008 10: 25: 18-04451Dea

56、r Sirs,Letter of Credit No BW4786 issued by National City Bank of New York has duly arrived. On perusal, we find that transshipment and partial shipment are not allowed.Since direct sailings for your port are few and far between, we have to ship via Hong Kong more often than not. As to partial shipment, we also stressed its benefit to both parties because we could ship immediately what we had on hand instead of waiting for the whole lot to be completed. We, therefore, are asking yo