International transactions Flashcards
What is it called when the seller responds back ? what does it contain ?
the response from the seller is the pro forma invoice : it is an ackowledgement of the sale transactions
what is the first step to engage a commercial relationship ?
you send a letter of inquiry, asking if they would like to contract with you, aski for different methods of contracting, alternative shipping/ costs
So when is the contract formed ?
it is when the purchase order is sent, that there is an offer and an acceptance : the pro forma invoice being the offer and the purchase offer being the acceptance.
there are numerous contracts following up the basic primary one. What are they called ?
All the other contracts (with the customed clearings, transport of the goods, carrier, etc) are the documentary sale. Documentary sale means you are selling the title of property, or a side of it, rather than the goods themselves.
what are the contracts concerning financing covering ?
it puts intermidiaries in contact from both parties: their banks which will ensure the payment. Banks are very important to confirm another bank (trustworthy of not)
What is a letter of credits?
a letter of credits is a letter of confirmation that the order has been made, and that certain instruments need to be delivered for the credit to be granted. It can be included in the pro forma invoice. there are 2 types of them.
what are the 2 types of letter of credits ?
The first one is the confirmed LoC : the bank will give them the money (no risk for seller)
the second one is unconfirmed LoC : not sure that the seller’s bank will immediatly give him the money, they will wait for the buyer’s bank to actually send it before giving it to him
what is a bill of Lading (BOL)?
when the carrier loads the goods and when they’re onboard, they deliver a BOL. That doc is signed and given to the seller’s bank so the bank can check it has been shipped. It is confirmed by the letter of credits.
what are the 2 types of BOL?
The non negotiable : name of a specific person who can get the delivery (the goods)
Negotiable : goods can be transfered to anyone with the BOL
what use is the BOL to the captain ? what does it contain?
it contains a serie of info. The captain can include clauses to not be responsible if anything happens to the goods. IT is not a contract in itself but a sign that there is a contract of sale of goods.
What is a contract of afreightment ?
it is a contract between the buyer and a person that picks up the delivery for the buyer from manufactoring to the harbor. It is an additional contract. You then can have a bill of freight by road of rail (instead of a BOL)
