- •Payment 1 payment terms
- •1 Negotiating the terms of payment
- •1.1 The buyer offers new terms of payment
- •2 Operating on open account facilities
- •2.1 The buyer requests to extend credit on open account terms
- •2.2 The seller makes enquiry concerning credit standing
- •2.3 The seller confirms open account terms of payment
- •2.4 The seller sends the statement of his account with the buyer
- •3 Proposing d/p terms of payment
- •4 Examples of contract payment clauses
- •4.1 Payment for collection
- •4.2 Payment out of lc
- •4.3 Currency clause
- •Vocabulary
2.4 The seller sends the statement of his account with the buyer
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PILFORAMA LTD. 18-H, Window Street, Hendon Middlesex L13 |
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January 1, 20__ MACHINE BUSINESS LTD. 11b Novinskij bul., Moscow, Russia
Cash discount 6% if paid within 5 days
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3 Proposing d/p terms of payment
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TRADE SYSTEM CO. 67, Lon Kale u-8, Chicago | ||
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Our ref. Your ref.
August 26, 20__ Messrs. Blewberg & Son Nesson House Newell Street Birmingham B3 3EL
Dear Mr Blewberg,
Thank you for your letter of enquiry of August 23, in reply to which we are sending you our price list, stating all prices FOB Southampton, together with brochures describing our latest models.
We inform you that we do not practise payment in installments as you proposed. We are pleased to offer you our usual terms of payment.
Our export orders are usually transacted on documents against payment (D/P) terms by collection of payment at Midland Bank, Eastern Branch. The Bill of Lading is released on payment of our invoice.
We are sure that the quality of our goods and services will meet your requirements, and trust that the terms outlined herein will likewise be suitable.
We look forward to receiving your order.
Yours sincerely, M.Proud M.Proud Export Manager |
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4 Examples of contract payment clauses
The payment terms that are actually specified in the contract depend on the customary methods of payment in a particular sector of industry, the conduct of negotiations between the parties, the existing market situation, country-specific restrictions such as exchange controls or import licences, the time span for the transaction, the regularity and scope of deliveries, the duration of an existing business relationship, and finally the degree of trust that exists between the parties.