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3PROPOSING D/P TERMS OF PAYMENT

TRADE SYSTEM CO.

67, Lon Kale u-8, Chicago

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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4EXAMPLES 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.

4.1 PAYMENT FOR COLLECTION

…

The Buyers will effect payment for the delivered Spares in pounds sterling within 30 days upon receipt of the following documents:

∙Full set of clean on board Bills of Lading issued in the name of Consignee, Russian port;

∙Sellers’ original invoice in 4 copies;

∙Release Note for Shipment issued by the Buyers’ Inspector;

∙Tests’ report;

∙Copy of Valid Export Licence, if required.

The Sellers are to deduct the expenses for insurance from their invoices according to clause «Insurance» indicating this sum on a separate line.

If the above documents are submitted for collection through the bank …, all bank expenses are to be borne by the Sellers both in the Sellers’ and Buyers’ countries.

…

4.2PAYMENT OUT OF LC

…

Payment to be effected in US dollars. The Buyers establish by cable an irrevocable confirmed divisible Letter of Credit with Impex Bank, Moscow, in favour of the Sellers covering the full value of the goods sold under the Contract plus margin. The Letter of Credit to be established by the Buyers not later than 14 days before the beginning of the delivery time stated above. The Letter of Credit to be valid 90 days. Payment out of the LC to be effected against presentation of the following documents:

∙Invoices in triplicate;

∙Bills of Lading;

∙Certificate of Quality;

∙Insurance Policy.

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All expenses connected with establishment, utilization and extension of the LC to be for the Buyers’ account.

Shipment on deck, partial shipment and transshipment are allowed. Stale documents are acceptable.

…

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4.3CURRENCY CLAUSE

…

The price is fixed in US dollars. Payment to be made in pounds sterling by converting the total amount of the invoice in US dollars into pounds sterling at the London average close rate of telegraphic transfers on New York as published in the «Financial Times» on the day preceding the day of payment.

…

FOCUS 2. Comprehension questions.

LEAD-IN

?What interest do Buyers and Sellers pursue when agreeing on terms of payment?

?What criteria are used for assessing terms of payment?

?What are the most widely-used terms of payment?

?Which terms of payment provide maximum security of payment?

?Which terms of payment provide maximum security of delivery?

LETTER 1

?When is payment on Invoice effected?

?What is Proforma Invoice?

?What terms of payment have been proposed by the Seller?

?Why does the Buyer refuse to accept them?

?What terms of payment are proposed in the letter by the Buyer?

?Why are these terms more favourable for the Buyer?

LETTER 2.1

?How is payment effected in transactions on open account?

?Why do these terms of payment imply credit facilities?

?What orders were placed by the Buyer?

?What does the Buyer think about the goods sold and the services rendered?

?Why does the Buyer want to change the terms of payment?

?What reasons for changing the terms of payment are put forward?

?Who can provide reference on the Buyer’s financial status?

LETTER 2.2

?Why does the Seller want to obtain information about the Buyer’s financial standing?

?Who does he apply to?

?Who shall the Seller’s bank contact in order to get the information?

?What information is of importance to the Seller?

?What open account terms are requested by the Seller?

?What promise is made by the Seller to the bank?

LETTER 2.3

?What new terms of payment have been requested by the Buyer?

?Does the Seller agree to grant these terms?

?When do they take effect?

LETTER 2.4

? On what condition is a 6% cash discount granted?

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LETTER 3

?What is enclosed with the letter?

?What terms of payment were requested by the Buyer?

?Why does the Seller refuse to accept the proposed terms?

?What terms of payment are offered by the Seller?

?On what condition is the Bill of Lading released?

4

? What do payment terms usually depend on?

EXAMPLE OF PAYMENT CLAUSE 4.1

?What documents should be presented for collection of payment?

?Which party to the contract is to pay insurance charges?

?Who bears the bank expenses?

EXAMPLE OF PAYMENT CLAUSE 4.2

?What currency is the LC to be opened in?

?What kind of LC is established?

?What does the LC cover?

?When is the LC to be opened?

?What is the validity of the LC?

?What documents are to be presented to effect payment out of the LC?

?Who bears the bank expenses connected with the establishment, utilization and extension of the LC?

?What provisions concerning the LC are stated in the clause?

EXAMPLE OF CURRENCY CLAUSE 4.3

?What are currency clauses for?

?What currency is the price fixed in?

?What currency is the payment to be made in?

?What rate of conversion is stated in the clause?

FOCUS 3. Study the notes, writing patterns and vocabulary.

NOTES

1.Statement of account as at… – выписка из счета по состоянию на какую-либо дату. Обратите внимание на предлог. Выписка из счета за какой-то период, например за квартал, сентябрь и т.д. – quarterly, September statement of account etc.

2.Account – одно из многочисленных слов, при переводе которых на русский язык необходимо обращать особое внимание на контекстуальный смысл. В коммерческой корреспонденции account обычно:

счет, банковский вклад, хронологическая запись о депонировании в банке определенной суммы на оговоренных условиях;

счет, бухгалтерская запись, статья в бухгалтерской книге, отражающая операции в хронологическом порядке;

контракт, отношения между продавцом и покупателем, согласно которым платеж совершается позднее;

клиент.

Значения словосочетаний с account смотри в VOCABULARY.

3.Outstanding – правильный перевод возможен только при наличии контекста:

неуплаченный долг, неполученные деньги;

не предъявленный к платежу или находящийся в процессе инкассации (о чеках и векселях);

о всех ценных бумагах в обращении;

нерешенный вопрос;

невыполненные обязательства;

выдающийся (напр., о людях).

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4. Debit, сredit – при переводе слов debit, credit, а особенно их глагольных форм, необходимо проанализировать подразумеваемый смысл операций. Если речь идет о реальном движении средств (напр. при переписке банк – фирма), использование заимствований вполне уместно. We have credited your account. Мы кредитовали Ваш счет. Если же речь о реальном движении средств не идет, (напр., при условиях платежа по открытому счету), то перевод предложения We have credited your account может быть следующим: Мы записали эту сумму в приходную часть Вашего счета с нами.

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5.To delay vs to suspend – глагол to delay «задерживать» означает, что действие – задержка

– происходит, как правило, по непредвиденным обстоятельствам. Глаголы to suspend/to postpone/to put off – «откладывать», будучи близкими по значению слову to delay, тем не менее обычно подразумевают запланированные или подконтрольные действия.

6.Transhipment/transshipment vs overload – при переводе с русского языка слова

«перегрузка» необходимо помнить о заложенном контекстуальном смысле – перегрузка с одного вида транспорта на другой (transshipment) или перегрузка как ощущение перенапряжения (overload).

WRITING PATTERNS

1.We have never practised such terms as Мы никогда не работали на условиях

2.We would like to offer you our usual Мы хотим предложить Вам наши

6.The financial standing of … is Финансовое положение компании …

7.They would like us to supply them on Они хотели бы, чтобы мы поставляли

8.We shall provide them open account Мы готовы согласиться на условия

10.The information which you could Любая предоставленная информация obtain would be treated as strictly будет рассматриваться как строго

confidential. конфиденциальная.

11.We have no objection whatever to У нас нет никаких возражений по

granting the requested terms of поводу предоставления запрошенных payment, namely payment on quarterly уcловий платежа, а именно платежа statement under Contract No.… против поквартальной выписки из

счета по контракту №…

13.Our export orders are usually Обычно наши сделки по экспортным transacted on documents against заказам осуществляются на условиях payment (D/P) terms by collection of «документы против платежа», банк-

14.The Buyers will effect payment in Покупатель осуществляет платеж в

15.If the documents are submitted for Если документы выставлены на

16.The Buyers establish by cable an Продавец по телеграфу открывает

17.We opened the Letter of Credit in Мы открыли аккредитив в пользу

21.Payment to be made in euros by Платеж осуществляется в евро путем

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LETTER 2.4

debit − дебет (бухгалтерская запись, отражающая платеж, расход в левой части баланса)

FOCUS 4. Fill in the gaps with one of the following words or word combinations. Use the appropriate tense form.

1.… is to be effected within some time upon receipt of the invoice, i.e. at some days.

2.A … is a detailed statement of costs, which is sent to the Buyer as a request to pay for the goods …, or as confirmation of quotations.

3.All expenses connected with establishment, … and extension of the LC to be for the Buyers’ account.

4.In transactions on … the Seller keeps a record of all invoices sent out to the Buyer and once a month issues a … as at a certain date.

5.Our export orders are usually transacted on … terms.

6.The Letter of Credit to be … by the Buyers not later than 14 days before the beginning of the delivery time stated above.

7.The Sellers are to deduct the … for insurance from their invoices according to clause «Insurance» indicating this sum on a separate line.

8.Unfortunately we cannot accept either … against Proforma or ….

9.We inform you that we do not practise payment by … as you proposed.

10.We intend to place an increased volume of orders on a … and would greatly appreciate it if we could … at 90 days.

11.We would like to know if the … of MACHINE BUSINESS is considered strong, and if we would be … in providing them open account terms at 90 days to the extent of $45,000 ….

1.The Seller and the Buyer have not come ... an agreement ... the terms ... payment ... the contract.

2.We cannot agree ... delay ... payment as we have to bear extra charges incurred ...

financing storage.

3.Downpayment ... invoice implies payment ... delivery ... the goods ... receipt ... the invoice.

4.Our usual terms ... payment are documents ... payment, for example payment ...

collection.

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5. We also practise payment ... documents or ... acceptance ... bills ... exchange.

6. Payment ... invoice is to be effected ... some time ... receipt ... the invoice, i.e. ... some days.

7. We cannot accept net cash payment ... Proforma ... transactions ... big amounts.

8. We want the goods to be paid ... drafts ... 90 days ... interest ... 5% p.a.

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9. Our usual terms of payment: ... drafts ... 30 days ... interest ... 3% p.a. ... the full value ...

the goods ... the contract.

10. We have never operated ... open account facilities.

16. Please inform if we would be justified ... operating ... open account terms ... days ... the extent ... $1,000.00 ... any one time.

17. We note your promptness ... settling the accounts.

18. We have no objection whatever ... granting new terms ... payment taking effect ... 1st November.

19.We are delighted that the services provided ... us meet ... your requirements and are

looking forward ... your early reply.

20. We have received your statement ... account ... us as ... June 30th 20__.

21. We are sending Proforma to enable you to effect payment ... installments.

22. Our export orders are usually transacted ... documents … payment terms ... collection ...

payment ... Midland Bank, Manchester.

23. The Bill of Lading is released ... payment ... invoice.

24. If the documents are submitted ... collection ... the bank, all bank expenses are to be ... the Seller’s account.

25. Payment is to be effected ... ... LC ... US dollars ... the shipping documents.

26. The Buyers are to issue an LC ... Impex Bank, Moscow, ... favour ... the Sellers ... the full contract value ... the goods.

27. All expenses connected ... establishment, utilization and extension … the LC to be ... the Buyers’ account.

28. Payment to be made ... euros ... converting the total amount of the invoice ... USD ...

euros ... the Frankfurt average close rate ... TT ... New York as published ... «The Financial Times» … the day preceding the day ... payment.

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22.Мы до сих пор не получили подтверждения сальдо квартальной выписки из счета.

LETTER 3

23.Мы готовы платить в рассрочку траттами.

24.Мидленд Банк выдаст коносамент против оплаты счета.

25.Платеж за оборудование производится частями постепенно, по мере того как будут заканчиваться операции по изготовлению оборудования. (...successively as the machine is being completed.)

4.1

26.Просим сообщить, когда были переданы документы на инкассо, и через какой банк.

4.2

27.Аккредитив действителен в течение 90 дней, все расходы по использованию, изменению и продлению – за Ваш счет.

28.Безотзывный подтвержденный аккредитив открыт на Ваше имя в Вашу пользу во Внешэкономбанке на полную сумму контракта.

4.3

29.Цена товара указана в долларах США, а счет выставлен в рублях. Контракт не содержит валютной оговорки, предусматривающeй перевод рублей в доллары США по курсу ЦБ на день платежа.

30.Сумма заказа в евро должна быть переведена в доллары США по среднему заключительному курсу телеграфных переводов на Нью-Йорк, опубликованному в газете «Файнэншл Таймс» в день, предшествующий дню платежа.

31.Уважаемые господа!

Мы тщательно изучили Ваше предложение по условиям платежа и хотели бы уточнить свою позицию по данному вопросу.

∙ Наша фирма не практикует авансовую форму платежа, а также операции

с открытого счета.

∙Тратты должны быть выставлены не на 6 месяцев, а на 3 месяца с начислением 4% годовых;

∙Все расходы по открытию и использованию аккредитива за счет Покупателя.

С уважением,

32.Платеж за оборудование будет произведен частями, а именно:

33.Уважаемые господа!

Мы получили Ваше предложение по поводу условий платежа, а именно инкассовой формы расчетов.

С сожалением сообщаем Вам, что мы не практикуем платежи на инкассо и согласны оплатить 10% суммы заказа авансом, 75% – наличными против отгрузочных документов и 15% – в течение 15 дней после монтажа оборудования.

Мы будем признательны, если Вы подтвердите эти условия платежа как можно скорее.

С уважением,

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FOCUS 7. Letters to make up.

1.Make up a letter from the Seller to the Buyer concerning the terms of payment. Follow the plan:

refer to the previous negotiations or correspondence;

offer the usual terms of payment practised by your company;

stipulate the documents against which the payment is made;

don’t forget about a complimentary close.

2.Make up a letter from the Buyer to the Seller on altering the terms of payment. Follow the plan:

refer to the long-standing cooperation and the terms of payment practised by your company;

suggest new terms of payment;

give your reasoning;

express your hope of the Sellers’ agreeing to your proposal and don’t forget about a complimentary close.

FOCUS 8. Role play

1.Hold negotiations on the problems raised in Letters 2.1 and 2.3.

2.Hold negotiations between the Buyer and the Seller on the terms of payment under the Contract. The Buyer prefers payment for collection. The Seller insists on CWO. As a result of the negotiations the parties come to an agreement – payment by an LC.

3.Student A. You are a representative of a Russian firm – Stroystar. Your firm has placed an order for aluminium fittings with Aluminium Alloy Co. Ltd. Now you want the supplier to send you a proforma invoice. Give one of the following reasons:

you have to pay for the goods against the proforma, i.e. before receiving them;

you want to make sure that the quotation on the basis of which the order was placed will not be changed;

the goods are sent on approval/on sale or return;

you need the proforma as a customs document.

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Student B. You are a representative of Aluminium Alloy Co. Ltd. A Russian firm – Stroystar has placed an order for aluminium fittings with you. Now they want you to send them a proforma invoice. You have no objections to the request and ask the buyer’s representative (choose any variant):

to settle the proforma invoice by draft through their bank and advise you at the same time. In that case you can guarantee delivery to Moscow within three weeks of receiving their instructions;

to agree to postpone delivery for two weeks (give an explanation);

to return the balance of unsold goods by the end of December.

4.Your firm has received a quarterly statement containing an item on which you have no record from a foreign supplier whose business you value highly. Make a telephone call to the firm and ask for an explanation. Choose either variant:

the supplier has made a mistake;

the statement is correct.

FOCUS 9. Act as an interpreter.

DIALOGUE 1

–Добрый день, госпожа Логинова, рад видеть Вас.

–Hello, Mr Green. Nice to meet you again.

–Думаю, что сегодня мы сможем обсудить условия платежа по контракту № 14 на поставку электрооборудования.

–We have never dealt with Russian companies. We would prefer payment in advance.

–Мы не можем согласиться на авансовый платеж. Мы практикуем платеж на инкассо частями по мере поставки, установки и испытания оборудования.

–Payment for collection is absolutely unacceptable. It does not provide security of payment. Do you practise such terms as payment by Letter of Credit?

–Да, платеж по аккредитиву также входит в нашу практику. Мы обычно открываем на имя Продавца безотзывный аккредитив во Внешэкономбанке на 90% стоимости контракта.

–And what about the balance of 10%?

–10% мы платим по счету, выставленному на инкассо после окончательных испытаний оборудования.

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DIALOGUE 2

–During the recent discussions with your representative we agreed upon almost all clauses. The only point left is the terms of payment.

–Видите ли, так как Вы неоднократно опаздывали с платежом, мы хотели бы, чтобы платеж осуществлялся против предварительного счета-фактуры.

–We have never settled on Proforma. What are our obligations in this case?

–Предварительная фактура направляется Покупателю до отгрузки товара, то есть оплата товара производится заранее, авансом. В этом случае исключается возможное кредитование Покупателя.

–So, as soon as we receive the Proforma invoice from you we will have to remit the money to your bank account, and only after that we will obtain the goods. Did I get you right?

–Да, совершенно верно. Мы предлагаем такую форму оплаты из-за того, что у нас возникли некоторые осложнения, и при сложившихся обстоятельствах мы не можем допустить задержки платежей.

–Though this way of payment is not very convenient, we have no choice but to accept it.

DIALOGUE 3 