Terms of Payment

A: What is your regular practice about the terms of payments?
B: We usually accept payment by irrevocable L/C against shipping documents.
A: I’m sorry you insist on payment by L/C. Could you make an exception and accept D/P or D/A?
B: Sorry, but that is out of the question. Payment by L/C is our usual practice of doing business with all customers for such commodities, especially with our new customers. Maybe as the business increases, we will accept D/P terms. But now, we can only accept L/C terms.
A: If that is the case, I will have no choice but to open a L/C for you.
B: The L/C should be opened by the purchaser 15 to 30 days ahead of delivery.
A: Can we pay for my imports in RMB?
B: We would prefer you to pay for your imports in USD.


A: I’m glad we’ll conclude the first transaction soon. Now, let’s talk about the terms of payment.
B: As you’ve seen from specimen contract, we require payment by confirmed, irrevocable L/C payable against shipping documents.
A: I see, but it will increase our expenses to open the L/C and tie up our funds. As an old client of yours, I think we should enjoy your special treatment. I hope you would allow us to pay by D/A or D/P.
B: I’m afraid not, it’s our usual practice to accept payment by L/C only.
A: On the condition of the period when the world market is inactive, I feel that to pay by L/C is not reasonable. In order to conclude the transaction, we both need to make some concessions. How about 50% by L/C, 50% by D/P?
B: Since you are our old customer and your order is quite large, how about 70% by L/C, 30% by D/P? This is not our normal practice. If you agree, we can make the deal. If not, I can’t do anything else.
A: All right, I agree.

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