3. Read, translate and act out the dialogue: Discussing Terms of Payment

B. – Beresov, P. – Peterson

P.: We are to take up one more question.

B.: I suppose it may concern the terms of payment.

P.: That’s right. We would ask you to increase the advance payment to €500.

B.: A 10% advance payment is our usual practice.

P.: I’m afraid it is insufficient in this case taking into account our meeting you halfway in granting you earlier delivery dates.

B.: Let it be so.

P.: You are to open an irrevocable letter of credit with TLC bank.

B.: We shall open a letter of credit as soon as we receive a notification that the first consignment of goods is ready for shipment.

P.: The letter of credit is to be valid for 5 days.

B.: That goes without saying.

P.: Thank you. I must say that we are quite satisfied with the results of the deal.

B.: We are also very pleased to have negotiated with you.

3. Make up dialogues based on the following assignments:

1. Meet your customer’s representative in Kazan to explain why you delay opening a L/C. Ask him not to postpone deliveries as your Russian partner expects the goods within the contractual dates.

2. Phone Mr. Brown, your buyer. Find out when and where you could meet him. Say you would like to discuss some points concerning execution of his order with him.

3. Meet your future customer. Ask him what he thinks of your draft contract. On the whole the draft is acceptable but the customer wants you to reconsider the terms of payment. Finalize the outstanding points.

4. Get in touch with Brown & Co and thank them for their enquiry. You are prepared to sell them machines on the terms stated in their letter, though you cannot accept their terms of payment. State your terms of payment.

3. Read and translate the text: No Funds

Indignantly a daughter said to her father when he returned home one evening: «Dad, why in the world did you tell me to put my money in such a bank? Why, it's absolutely on the rocks.»

«What,» said her father, «that's one of the strongest banks in the country. What do you mean by such a statement?»

Waving a check in the air, his daughter replied, «Look at this. It's my check for $25.00 and it was returned today by the bank and marked “No Funds”.»

VII. Credit Letters Credit Inquiries

When a new customer asks for credit, the supplier must first find out whether the customer is creditworthy. To this end, he sends credit inquiries (or: status inquiries) to possible sources of information.

The most important credit information sources are:

1. the customer (he may be asked to furnish information about himself, for example, by filling in a credit application form, or by submitting a copy of his latest balance sheet),

2. the customer's trade references (other suppliers whom the customer has given as references),

3. the customer's bank references (the banks named by the customer),

4. other firms known to have done business with the customer,

5. inquiry agencies (US: commercial or mercantile agencies).

It should be noted that banks give information only to other banks. Therefore, a supplier seeking information from his customer's bank can secure this information only through his own bank.

This chapter is chiefly concerned with inquiries addressed to trade references. When such inquiries are made, the inquirer should always be aware of the fact that he is asking a favour. Credit inquiries are often accompanied by a stamped and self-addressed envelope or, if they are sent abroad, by an addressed envelope and an Inter­national Reply Coupon.

Many letters of inquiry do not mention the name of the person or firm about whom the inquiry is made; the name is placed on a separate sheet of paper which is attached to the letter. This is done to ensure confidential treatment of the matter.

The inquirer must, of course, assure the firm he is writing to that the information given will be treated confidentially and without responsibility on the latter's part.

Credit inquiries often close with an offer to reciprocate favours. Many businessmen feel, however, that this goes without saying.

Letters requesting credit information, and the envelopes, in which they are sent, are marked Confidential, Strictly Confidential, or Private and Confidential.