1 Flashcards
The Sales Contract Terms? (5)
- Description of The Goods
- Shipping Terms
- Price
- Quality
- Payment Terms
Seller/Exporter make delivery in anticipation of payment and may deliver against what? (8)
- Cash In advance
- Cash on delivery
- Barter
- Open Account Credit
- Documentart Draft
- Avalized Promissory Notes
- Documentary Letter of Credit
- Some hybrid of foregoing
Transport Industry Parties? (6)
- Freight Forwarders/ Freight Consolidators
Travel Agent for Freight.
- MTOs and NVOCCs
Multimodat transport operators.
Non-Vessel-Operating common carriers.
- Customs Brokers
- Shippers
- Transport Documents
- Consignees
Consignees?
The Person to Whom the goods are to be delivered.
If the transport doc. is not being used as a title document, the buyer is usually the consignee.
When the transport documents serves as a title document, the foods will be consigned “deliver to the order of XYZ company”.
Forfaiting?
Extended financing of buyer’s acquisition by guarantator such as Bank or Government Agency.
Promissory Notes? Aval?
Buyer’s promissory notes or accepted drafts presented to seller and guaranteed by a financial institution.
The notes will be required to bear an aval i.e. (id est - that is) a guaranty by stronger party which migh be e.g. (exempli gratia - for example) the buyer’s bank.
Steps of Documentary Draft Transaction?
- Drafting internatinal sales contract.
Specifying Doc. against payment or Cash against documents.
- Obtainig the Document of Title.
Multimodal transport doc.
Bill of lading.
Warehouse receipt.
- Drawing the Draft.
Seller - Drawer
Buyer - Drawee; Payee.
- Inititate Collection of the Documentary Draft.
- Presentment to buyer. Honour or Dishonour by buyer.
- Surrendering the Title Documents.
- Delivery to buyer.
Trade Drafts?
Also known as the “bill of exchange”.
- An order to pay involving three parties.
- Drawer orders drawee.
- Payable to the order of “someone/bearer”
UCP?
UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDITS.
Discounting the Draft?
When seller’s bank agree to advance funds to seller’s account before the buyer pays.
2 Warnings regarding all Letters of Credit?
First:
- Must Contain an Expiry (the last date by which documents may be presented).
- Unless the credit provides otherwise, the documents must be presented within 21 days of the date of shipment indicated in the transport document.
Second:
No documents can be missing, none of them may vary. The issuing bank must give notice of any within five baninkg days following its receipt of the documents.
Benefits of LC to the Seller?
- Shipment made using a title transport document»_space;> Seller retains control of the goods until issuing bank honours the seller’s request for payment»_space;> Issuer debits the account of the buyer and transmits documents of title to the buyer.
- Documentary credit enhances the seller’s ability to obtain bank financing for the transaction.
Benefits of LC to the Buyer?
- Access to the seller as a source of supply without having to pay cash in advance.
- Protect itself form paying against defective goods.
Functions of Nominated bank which can also be the advisor?
- Paying
- Accepting
- Incurring a deferred payment obligation (Возникновение обязательства по отсрочке платежа)
- Negotiating
What is nominated bank?
When beneficiary asks the applicant to nominate a bank local to the beneficiary.
For the convenience of having the credit available at a local bank, the beneficiary may ask the applicant to direct the issuer to nominate a bank local to the beneficiary to honour or negotiate the beneficiary’s draft and documents or demand for payment.
