Unit 9:On terms of payment 1
Having settled the price of transaction. Mr Fracer is having a talk about payment terms with Mr Li from our trading corporation.
F:Of talking over the price,at all is on the high sides as compared with those of arrival goods,the quality of your products,I suppose,will probably make up for it.Now,let's come to the terms of payment.
L:Ok.That's what I am going to say.As usual,our terms of payment are by confirmed,irrevocable at sight draft against presentation of shipping documents.
F:But other suppliers can give us more favorable terms.You see,the world market has been rather down recently,besides,our exchange quota is rather limited. So,we'd like to use DA to this transaction.
L:I am afraid we cannot accept the DA,as you know,devaluation of the dollar and its consequent repercursions are major currencies.Having given rise to grave and certain days in the international monatery market.Therefore,we find necessary to handle our business on LC basis,at least for the time being.
F:Payment by LC involves additional expense for us.This leaves no margin and profits at the terms of payment.
L:Mr Fracer,you know quite well that chinese goods enjoy an excellent reputation in foreign markets.Moreover,there is at present a volk for chinese goods.The article you are interested in is greatly in demand and it sells especially well.The quick turnover will of course will not only offset your LC expenses ,but give your factory a satisfactory profits.
F:As far as I know,you sometimes grand your clients such terms as DA and DP,don't you?
L:Yes,occasionally we do.But it is only at the very special circumstances that we agree to other payment terms.
F:Ours is not an normal case,is it?It is indignitial of sample order.It doesn't pay to adopt LC terms for order as small as ours.The limited profits if any it is even enough to balance additional balances.
L:Um,well,in order to finalize the business,we agree to DP sight as the best we can do.
F:Thanks for your consideration,still is not good enough.As you know,I am a middle man,I need sometime to find the reliable clients,after I receive your bill.It would help me a lot if DP after sight is accepted,even 60 days will do.
L:I am afraid no further concession can be made.It is just facility you are doing business that we make that concession.We cannot be better place elsewhere,can you?
F:It seems I have to take a thing as they are.Let's put it into contract.
L:Mr Fracer,I should mention we accepted such terms only once.Once goods were dispatched,we will show you a signed draft against you,which would be sent together with the shipping documents through our remitting bank to the collecting bank at your end.It is still understood that you are to honor it on presentation.
F:You may rest assure that this documentary jag will be duely honored on presentation.I did some business with San corportions on collection basis.They can proof to you my credit.
L:We trust you and hope you will leave us your credit.
F:Surely I will.Well,as a selling season is approaching,I'd like you to make a prompt shipment.
L:We will try our best.
Dialogue 1:
This will a few minutes before we visit the factory.May I ask you a question?
Go ahead please?
Could you agree the payment by DA?This is a sample order.
Occasionally we do.But yours is normal case,isn't it?
As you know,it doesn't pay to open an LC with bank for such a small amount.
We will consider that when we make you the firm offer.
For regular orders,couldn't you agree to payment by LC at 60 days at sight?
I am afraid not.Our usual practice is LC at sight.
I see.
Here are cars comes for picking us up.
Let's go.
Please.
Dialogue 2:
S:Mr Hong,do you accept DA?
H:Well,we usually accept the payment by confirmed irrevocable credit at sight.
S:It's safer for payment by LC for large orders.But our order is really small one,further more,we are old friends,this is not the first dealing between us anyway.Do you doubt our credit position?
H:No,Mr Smith.Certainly,we have faith in you.But the international monternary market is changeable,nobody can stop a possible decline in prices,which will bring troubles to us.
S:How about DP at sight down?
H:We cannot accept other payment terms this trade except LC.We will consider DP terms at proper times in the future.
S:Well,we cannot reach an agreement today,I am afraid.Shall we discuss it tomorrow,after I consulted with home offices.
H:That's alright. |