Transcript Document

The Form of a Sales Contact
1.Words & Expressions
2.Activities for Comprehension
1.Words & Expression
(1)Shipping mark; (2) on consignment; (3) force majeure;
(4) CFR;(5) FOB; (6) a certificate of origin; (7) notifying bank;
(8) the International Commercial Chamber Publication 500;
(9) B/L;(10) through bill of lading;(11) shipping documents;
(12) consular invoice; (13) usance L/C
(1)shipping mark
A shipping mark is a mark used to identify goods or
cargos. It hastens the process of identifying goods
particularly where the goods are in large numbers or a wide
variety. The mark is usually of a particular shape, for
example a diamond shape and the company's or
consignee's name is included as well.
(2) on consignment
With the provision that payment is expected only on completed sales
and that unsold items may be returned to the one consigning: The retailer
accepted the shipment on consignment.
(3) force majeure
A French term literally translated as "greater force", this clause is
included in contracts to remove liability for natural and unavoidable
catastrophes that interrupt the expected course of events and restrict
participants from fulfilling obligations.
This clause is meant to benefit both parties in a contract. Force
majeure would come into play, for example, when you buy a house. If the
house is destroyed in a fire caused by a lightning strike, neither party
remains obligated.
(4) CFR (Cost and Freight)
A trade term requiring the seller to arrange for the carriage of goods by sea to a
port of destination, and provide the buyer with the documents necessary to obtain
the goods from the carrier. Under CFR, the seller does not have to procure marine
insurance against the risk of loss or damage to the goods during transit.
Contracts involving international transportation often contain abbreviated trade
terms that describe matters such as the time and place of delivery, payment when
the risk of loss shifts from the seller to the buyer, and who pays the costs of freight
and insurance.
The most commonly known trade terms are Incoterms, which are published by
the International Chamber of Commerce (ICC). These are often identical in form to
domestic terms (such as the American Uniform Commercial Code), but have
different meanings. As a result, parties to a contract must expressly indicate the
governing law of their terms.
It's important to realize that because this is a legal term, its exact definition is
much more complicated and differs by country. It is suggested that you contact an
international trade lawyer before using any trade term.
(6) FOB (Free On Board)
A trade term requiring the seller to deliver goods on board a vessel
designated by the buyer. The seller fulfills its obligations to deliver when the
goods have passed over the ship's rail.
When used in trade terms, the word "free" means the seller has an
obligation to deliver goods to a named place for transfer to a carrier.
Contracts involving international transportation often contain abbreviated
trade terms that describe matters such as the time and place of delivery and
payment, when the risk of loss shifts from the seller to the buyer, as well as who
pays the costs of freight and insurance.
The most commonly known trade terms are Incoterms, which are published
by the International Chamber of Commerce. These are often identical in form to
domestic terms, such as the American Uniform Commercial Code, but have
different meanings. As a result, parties to a contract must expressly indicate the
governing law of their terms.
It's important to realize that because this is a legal term, its exact definition
is much more complicated and differs by country. It is suggested that you
contact an international trade lawyer before using any trade term.
(6) a certificate of origin (CO)
A document declaring in which country a commodity or good was
manufactured. The certificate of origin contains information regarding the
product's destination and country of export and is required by many treaty
agreements before being accepted into another nation.
Trade restrictions, tariffs, embargoes and duties can all be affected
by the certificate of origin. Because some nations limit or ban imports
from certain countries, all incoming goods would be required to have a
CO. To encourage imports from specific nations, governments may lower
the duty on goods if accompanied by a CO from those countries.
(7) notifying bank
A bank in a foreign country to which another bank in the domestic
country sends a letter of credit on behalf of a client. The notifying bank
honors the letter of credit and transfers requested funds to the client. A
notifying bank is also called an advising bank.
(8) the International Commercial Chamber Publication 500
The International Chamber of Commerce (ICC; French: Chambre de
commerce international (CCI)) is the largest, most representative business
organization in the world. Its hundreds of thousands of member companies in over
130 countries have interests spanning every sector of private enterprise.
A world network of national committees keeps the ICC International
Secretariat in Paris informed about national and regional business priorities. More
than 2,000 experts drawn from ICC’s member companies feed their knowledge and
experience into crafting the ICC stance on specific business issues.
The UN, the World Trade Organization, and many other intergovernmental
bodies, both international and regional, are kept in touch with the views of
international business through ICC. The ICC was the first organization
granted general consultative status with the United Nations Economic and Social
Council.
(9) B/L (Bill Of Lading)
A legal document between the shipper of a particular good and the
carrier detailing the type, quantity and destination of the good being
carried. The bill of lading also serves as a receipt of shipment when the
good is delivered to the predetermined destination. This document must
accompany the shipped goods, no matter the form of transportation, and
must be signed by an authorized representative from the carrier, shipper
and receiver.
For example, suppose that a logistics company must transport
gasoline from a plant in Texas to a gas station in Arizona via heavy truck.
A plant representative and the driver would sign the bill of lading after the
gas is loaded onto the truck. Once the gasoline is delivered to the gas
station in Arizona, the truck driver must have the clerk at the station sign
the document as well.
(10) through bill of lading
A bill of lading that allows the transportation of goods both within
domestic borders and through international shipment. The through bill of
lading is often required for the exportation of goods, as it serves as a receipt
or carriage contract for the products. As with any bill of lading, this document
outlines the type and quantity of transported good and notifies the shipper of
its destination.
A transporter can move products both within a country and export them,
often by air, with a through bill of lading. The through bill contains an "inland
bill of lading", which is the documentation required for domestic
transportation. If the shipper wants to move the goods across the ocean, the
through bill of lading will not be adequate. An "ocean bill of lading" will be
required for any goods moving across the sea.
(11) shipping documents
A shipping list, packing list, waybill, packing slip (also known as
a bill of parcel, unpacking note, packaging slip, (delivery)
docket, delivery list, manifest or customer receipt), is a shipping
document that accompanies delivery packages, usually inside an
attached shipping pouch or inside the package itself. It commonly
includes an itemized detail of the package contents and does not
include customer pricing. It serves to inform all parties, including
transport agencies, government authorities, and customers, about the
contents of the package. It helps them deal with the package
accordingly.
(12) consular invoice
A document certifying a shipment of goods and shows information
such as the consignor, consignee and value of the shipment. A consular
invoice can be obtained through a consular representative of the country
you're shipping to. The consular invoice is required by some countries to
facilitate customs and collection of taxes.
A consular invoice also has a copy of the commercial invoice in the
language of the country, giving full details of the merchandise shipped. In
general, the purpose is to provide the foreign customs authority with a
complete, detailed description of the goods so that the correct import duty
can be levied.
(13) usance L/C
A letter of credit payable at a determined future date after presentation
of conforming documents
2.Activities for Comprehension
(1)What should be listed in a sales contract?
(2) How different is a contract from a confirmation?
(3) What bank can open an L/C for you as an exporter?
(4) What would happen if an L/C had a mis-spelt word?
(5) Why should the L/C be transferable when the deliverer of a
consignment is someone else other than the exporter?