New zealand bank

Chairman: Sir Francis Tuckman Directors: L.N. Bowman, P.O. Shearing, L.D Nesterman Takapuna House,

Takapuna Street, Wellington 8

Telephone: 448135/6/7/8

Telex: NewbanNZ 28131

Fax: 806358

29 May 20—

Mr M. Tanner

N.Z. Business Machines Pty.

100 South Street

Wellington

Dear Mr Tanner,

In accordance with your instructions of 3 May our agents, Eastland Bank, London, accepted a draft for £23, 100 drawn by Delta Computers Ltd. on presentation of shipping documents for a consignment sent to you on 24 May.

We have debited your account with the amount plus our charges of $280 NZ. The documents are now with us and will be handed to you when you call.

Yours sincerely,

I. Close Manager

International crafts ltd.

Thameside, Walworth, London SE3 2EL

Chairman: B. Valour

Telephone: 081 834 2179, 081 834 2710 Cable: intercra Telex: 315620 Fax:081-8344431

Lee Boat Builders Ltd. 9 April 20—

Dock 23

Mainway

HONG KONG

Dear Sirs,

We spoke to your representative, Mr Chai, at the Earls Court Boat Show in London last week, and he showed us a number of dinghies which you produce, and informed us of your terms and conditions.

We were impressed with the craft, and have decided to place a trial order for ten of them, your Cat. No. NR17. The enclosed order, No. 90103, is for delivery as soon as possible as the summer season is only a few weeks away.

As Mr Chai assured us that you could meet any order from stock, we have instructed our bank, Northern City Ltd., to open a confirmed irrevocable letter of credit for £7,300 in your favour, and valid until 1 June 20—.

Our bank informs us that the credit will be confirmed by their agents, Cooper & Deal Merchant Bank, Pekin Road, Hong Kong, once you have contacted them, and they will also supply us with a certificate of quality once you have informed them that the order has been made up and they have checked it.

You may draw on the agents for the full amount of the invoice at 60 days, and your draft should be presented with the following documents:

Six copies of the bill of lading.

Five copies of the commercial invoice, c.i.f. London

Insurance certificate for £7,140 (A.R.)

Certificate of origin

Certificate of quality

The credit will cover the invoice, discounting, and any other bank charges. Please cable us confirming that the order has been accepted and the craft can be delivered within the next six weeks.

Yours faithfully,

В. Valour

International Crafts Ltd.

Enc. Order No. 90103

9.9

Specimen letters: a documentary credit transaction (2)

9.9.1

From the importer to the exporter

This letter, from the buyer (importer) in London to the seller (exporter) in Hong Kong, is the first step in our second example of a documentary credit transaction. Note that International Crafts ask for a certificate of origin, which they need since they intend to re­export the dinghies to France, which is an EEC country. Note also that they will use their bank's agents to verify the quality of the boats.

9.9.2

From the exporter to the importer

Northern City Ltd., who are International Crafts' bankers, have now notified their agents in Hong Kong, Cooper & Deal, who have in turn advised Lee Boat Builders that the credit is available. Meanwhile Lee have cabled International Crafts confirming that they have accepted the order, and can deliver within six weeks. They follow this by sending this letter, advising shipment.

Questions

1. When will the consignment arrive in London?

2. How have the dinghies been packed?

3. What documents were required by International Crafts Ltd.?

4. What does '60 d/s' mean?

5. Who are Cooper & Deal, and what role do they play in the transaction?

6. What will the Northern City Bank advise International Crafts?

7. What restrictions do Lee Boat Builders put on their guarantee?

8. What must International Crafts do once they have received the consignment?

9. Which words in the letter correspond to the following: should arrive; small boats', boxes; pays for; send; warranty?

Lee Boat Builders Ltd.