Payment Terms Generally Adopted In Foreign Trade

Payment Terms Generally Adopted in contrary Trade
As delivery is the essence of the contract for the importer ( foreign buyer), seasonably and sure receipt of payment is the matter that is of prime intimacy to the exporter. In a contract for export of goods, it is natural that in that location ar a number of clauses defining in shamble name how the payment is to be made to the exporter. There ar different modes of making payment to the exporter. Some of the payment terms generally adapted in foreign trade are:
1.Clean payments:
This is the direct form of settlement between the Exporter and abroad buyer, without the intermediation of a Commercial Bank. The merchandise is shipped by the exporter and the cargo ships documents and invoice are directly forwarded to the overseas buyer. The buyer thence slow ups the payment. This mode of transacting carries an element of risk for the exporter, if the foreign buyer defaults to make payment. If the payment is remitted in advance, there is An element of risk for the buyer. hence this form of settlement can be resorted to only in exceptional cases, where the transaction is for a small value, or that the exporter and overseas buyer belong to a same group of concerns. Or the two parties have long-standing satisfactory dealings.
2.



Documentary Bills on D/A terms:
Under this system, the goods are consigned by ship, the raptus documents and commercial invoice are attached to a hold Draft and send to the overseas banker of the Buyer for collection. The documents are delivered to the buyer against payment at the overseas centre. These are called D/P Bills. When a L/C cannot be established this is the nonsuch mode of payment. The exporter can also attach the afterwards raft bill for a specified No. of days and send word the Banker to deliver the Bill of Loading and other documents against acceptance of the after sight draft. The banker will deliver the documents and on the due find of the Draft he will collect the amount and remit to the exporter....If you want to get a full essay, order it on our website: Orderessay



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