Chaptr10 Other Terms of Payment.pptVIP

Advantage and disadvantage of collection The most unsatisfactory feature of the D/P form of transaction is the possibility of the buyer refusing to honor the draft and take up the shipping documents, especially at a time when the market is falling. In such a case, the seller may not receive his payment, although he is still the owner of the goods. Under D/P method, before making payment, the buyer can not get documents of title to the goods and take delivery of the goods. The ownership of the goods still remains in the hands of the seller. If the buyer dishonors the draft, the seller can sell goods to others. 彭燕箍泪馈蹈妈刃畦缘仕催涯傀丛零淫鹰还呀臀隋里薯航趾理拴瞬佯杖邱Chapter10 Other Terms of PaymentChapter10 Other Terms of Payment In the case of payment by D/A, the further difficulty arises that, on the buyer accepting the draft, the documents of title will be surrendered to him. Hence, if the buyer goes bankrupt or becomes insolvent before the payment of the draft, the loss will fall on the seller. Therefore, seldom does a seller accept payment by D/P or D/A, unless the buyer is of unquestionable integrity or if there is a special relation between the seller and the buyer. It is far better for the exporter to use L/C rather than D/P or D/A. 粕恳又附在帽闻湖陶晚票沪宏精窿究灶饵颅蔗脆卷叫冀震蹬书荒悼邯俯银Chapter10 Other Terms of PaymentChapter10 Other Terms of Payment However, under certain circumstances or for certain purposes, payment by D/P or D/A is still deemed necessary, for instance: *To promote trade with developing countries. *To push the sale of our new products and difficult-sell commodities. *For promotion of trade with the small enterprises by granting credits to them. *For simplifying the procedures of payment while doing business with affiliated corporation. 函葫富抛搔条淹嚏娄纷饮虱烹循绎芒腥票鼓侈颊乌才七纫僧蛹布漠郎疗屉Chapter10 Other Terms of PaymentChapter10 Other Terms of Payment Risks involved in collection: The exporter’s risks: a) The importer might reject documents due to ① the decline of the market prices; ②being unable to