商务英语函电Unit 7 Terms of Payment.ppt

Unit Seven
Terms of Payment
Part One: Teaching Aims & Requirements
1. Help students to get a general knowledge of the terms of payment in International Trade Business, including the Letter of Credit which is the one most often adopted in International Cargo Trade.
2. Help students to study the specimen letters regarding payment and payment terms and learn some useful words and expressions in this respect.
3. Help students to learn how to write such kind of letters, especially the letters asking for amendment to L/C.
Part Two: Background Knowledge
I. Payment in International Trade
In international trade, buyers and sellers are in two countries. Sometimes, they have to do business with unknown traders. If the seller delivers goods before payment has been made, he runs certain risks of nonpayment of the buyer; and if the buyer makes payment in advance, he likewise runs risks of non-delivery of the goods. Thus, it es necessary for a third party to act as an intermediate between them to solve the problem of payment. This party is the bank, who either guarantees payment to the seller and examines the seller’s shipping documents for the buyer or makes collection for the seller.
II. Terms of payment in international trade
Terms of payment means way or method of making payment. As they have much to do with the interests and benefits of both the buyer and the seller, they should be agreed upon during the negotiation of a transaction and be explicitly laid down in the contract.
The methods of payment we use in the financing of international trade are chiefly the Letter of Credit, Collection and Remittance.
1. The Letter of Credit
The most often used method of payment in our international trade is the L/C which is a reliable and safe method of payment. It not only facilitates trade with unknown buyers and sellers, but also gives protection to both sellers and buyers.
An L/C is a written promise made by a bank that it will make payment for the goods shipped. That is to sa