Terms of payment

4 important questions on Terms of payment

The three forms of the Letter of Credit:

  1. Recovable L/C
  2. Irrevocable but unconfirmed L/C
  3. Confirmed irrevocable L/C

Mention five arrangements of payment:

  1. Cash in advance
  2. Letter of credit
  3. Documents against payment and acceptance
  4. open account
  5. Consignment

Documents agains acceptance:

When a draft is drawn, credit is extended to the buyer on the basis of the buyer's acceptance of the draft calling for payment within a specified time and usually a specified place.
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Factors the exporter will consider in negotiating terms of paument for goods to be shipped: (3)

  • Practices in the industry
  • terms offered by competitors
  • relative strenght of the buyer and the seller

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