Exercise 16 Study the bill of exchange and answer the questions

Here are some abbreviations you can meet

Exercise 15 Look at the letter of credit and answer the questions.

Letter of credit is an official letter from a bank allowing a person to take money from another bank.

1. Who is the buyer? 2. Who is the seller? 3. Which is the opening bank? 4. Which is the advising bank? 5. What kind of letter of credit is it? 6. What kind of draft will be attached to the transport documents?

ROYAL BANK London, England	Letter of Credit
Applicant Shah Import Co. 176 Stepney Road London SE23 7HL U.K.	Beneficiary Rajah Tea Company 65 Gandhi Road Bombay 297645, India	Advising bank Anglo-Indian Bank Governor’s Bldgs. Bombay 273645, India
Reference no. HFDS9876	Date and place of issue 20 June 1999, London	Date and place of expiry 27 July 1999, Bombay
Transhipment [ ] Allowed [x] Not allowed Partial shipment [ ] Allowed [x] Not allowed	Amount Rs. 75,000 (seventy-five thousand rupees)
Credit available with Anglo-Indian Bank, Bombay by negotiation against the documents named herein and beneficiary’s draft at 60 days sight drawn on Royal Bank, London, UK
Shipment/dispatch from Bombay	For transportation to London	Not later than 6 July 1999
Documents to be presented Commercial invoice in 6 copies indicating L/C number Full set of clean bills of lading made out to order of issuing bank of L/C marked prepaid and notifying applicant also indicating this L/C number Certificate of origin Packing list These documents to be presented within … days of the issue of the transport documents but within the validity of the credit.
Instructions for advising bank Please advise beneficiaries of the opening of this credit, adding your confirmation. Method of reimbursement At maturity we will reimburse you according to your instructions Documents should be forwarded to us by air mail. James Anderson for ROYAL BANK

in business documents:

Dt. deb. (= Debit)

a/c (= account)

b/t (= brought forward) перенесено на більш пізній термін

c.w.o. (= cash with order) готівковий розрахунок при отриманні замовлення

Cr. (= Credit)

c/f (= carried forward) перенесено

Bal. (= Balance)

N/C (= no charge) без нарахувань

The bill of exchange is a signed document ordering someone

to pay someone else a particular amount of money

₤ 258 due 11^th May, 2010 London, 8^th February, 2010 Three months after date pay to our order the sum of two hundred and fifty-eight pounds sterling only for value received*. To Messrs. A.B.White & Co. Sheffield For and on behalf of Smith Co., Ltd. G.Brown

* на оплатних засадах

1. Who is the drawer? 2. Who is the drawee and who is the bill drawn on? 3. Who signed the bill on behalf of the drawer? 4. What should the drawee do when he is presented with the bill? 5. How much should he pay? 6. At what time should he pay? 7. Who should the drawee pay the above mentioned sum to?

Exercise 17 Read and translate the dialogue ‘Discussing the price problem’.

Brown: Let’s discuss the commercial side of our transaction. We were inclined to consider the prices today.

Green: You find them attractive, don’t you?

B: Unfortunately, no. Comparing them with your competitors’ they are 5-10 % higher.

G: I’m afraid, I can’t agree with you there. Don’t you know that we have made some modifications and reduced the power consumption of our equipment?

B: I know that. However our main requirements are reliability and trouble-free performance of the equipment.

G: We can assure you that we won’t let you down.

B: It’s fine. But as we are in close touch with the market now we are informed that other companies can quote lower prices.

G: Right, but business is business. What are your reasons for a discount?

B: I’ve already mentioned your competitors’ prices. Besides, your price must depend on the amount of the Contract.

G: Well, if you increase your order to … dollars we will be able to give you a 2 % discount.

B: It’s better, but we expected at least a 4 % discount.

G: Let us make some calculations. 3% and no more. Even this concession leaves only a very small profit for us.

B: I’m afraid that at this time we can’t raise the sum of the Contract. Would you take risks and sign our first contract at this price.

G: Well, that’s reasonable. We always give our partners a square deal. But this price is final. What currency can you pay: in sterling or dollars?

B: We insist on dollars.

G: No objections. We could meet tomorrow after you look through all papers closely. What time could you come here again?

B: I suppose I can make it only after two.

G: Than see you at 3. Goodbye.

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