Terms of payment

Pre-reading exercises

Unit VII

Grammar:Revision of the Tenses (active and passive voice)

Revision Numerals

Word-building

Exercise I. Pronounce the following words:

• Cheque • Origin • Remittance • Transfer • Letter of credit • Secure • Expensive • Overcome • Gap • Title • Collection • In due time • Subsequent • Cost • Bill of exchange • Draft • To draw draft • Acknowledge • Debt

Чек Походження,.джерело Переказ Документ про передачу грошей Акредитив Застрахований Дорогий Подолати Інтервал Право власності Збирання У свій час Наступний,пізніший,додатковий Вартість Вексель Чек тратта Виставляти тратти Підтверджувати Борг

Exercise II. Read the headline of the text. What do you know about terms of payment? What are they?

Reading

Read closely the text, translate it into Ukrainian and try to retell it:

Payment in foreign trade may be made in cash and on credit. There are different methods of cash payment:

1. By cheque (but it is not practicable as a cheque is payable in the country of origin and its use is time-washing to say the least. That’s why cheques are mostly used for payment in home trade).

2. By telegraphic or telex transfers or post (mail) remittance which is made from the Buyers’ bank account to the Sellers’ in accordance with the Buyers’ letter of instruction. Actually this method of cash payment may sometimes take several months, which is naturally very disadvantageous to the Sellers. The transfer is carried out at current rates of exchange.

3. By letter of credit. The Letter of Credit is the most frequently used method of cash payment because it is advantageous and secure both to the Exporter and to the Importer though it is more expensive than payment by transfer. It overcomes the gap between delivery and payment and gives protection to the Sellers by making the money available for them on the fulfillment of the transaction and to the Buyers because they know that payment will only be made against shipping documents giving them the title for the goods. This method of payment is often used in dealings with developing countries.

4. For collection (Payment for collection does not give any advantages to the Exporter because it does not give any guarantee that he will receive payment in time or at all. That’s why the Exporter usually requires that the Importer presents a guarantee of a first class bank that payment will be effected in due time. Also, there is a long period of time between the delivery of the goods and actual payment. But it is advantageous to the Importer because there is no need to withdraw from circulation big sums of money before actually receiving the goods).

Payment for collection against documents (with subsequent acceptance or very often telegraphic collection with subsequent acceptance) is mostly used in trade with East European countries. The cost involved in effecting payment for collection are twice or three times lower than those by letter of credit.

Most modern business is done on a credit basis which may be: by drafts (by Bills of Exchange – B/E) – the Exporter credits the Importer which is advantageous to the latter. A draft (a bill of exchange) is an order in writing from a Creditor to a Debtor to pay on demand or on a named date a certain sum of money to a company named on the Bill, or to their order. It is drawn by the Sellers on the Buyers and is sent through a bank to the Buyers for acceptance (i.e. for acknowledging the debt).

Дата добавления: 2014-11-25