5--Payment-by-LC

PaymentbyL/CTheletterofcreditisessentialinthefinanceofinternationaltrade.Itisreliableandsafemethodqfpaymentanditprotectstheselleraswellasthebuyer.However,inviewoflongfriendlyrelationsandfuturebusiness,sellerswouldconsideracceptingtermsofD/PorD/A.Havingsettledtheprice,Mr.WoodishavingatalkaboutpaymenttermswithLiuYingfromChinaTradingCorporation.W:I'mgladthatwe'vesettledtheprice.Nowwhataboutthetermsofpayment?L:Weonlyacceptpaymentbyconfirmed,irrevocableletterofcreditpayableagainstdraftatsight.W:ButIheardyouwouldacceptdifferentkindsofpaymentsuchasD/PandD/A.L:Quiteright.Butitwasonlyunderveryrarecircumstancethatwedidso.W:Asthisisthefirsttransactionwe'vedonewithyou,iwouldsuggestthatyougiveusmorefavorableterms.WhataboutD/A?L:I'mafraiditcan'tbedone.PaymentbyL/Cisourusualpracticewithallcustomersforsuchcommoditiesespeciallywithournewcustomer.Asamatteroffact,L/Cprotectstheimporteraswellastheexporter.W:ThenhowaboutD/Patsight?L:Perhapsweshallconsideritafterwehavemorebusinesstogether.Butsofar,wehaven'tknownmuchaboutcreditstatuseachother.SoI'mafraidwemustinssistonourusualform.W:Tobehonest,aletterofcreditwouldaddtothecostofmyimports.Inopeningaletterofcreditwithabank,Iwillhavetopayadeposit.Thatwilltieupmyfunds.L:Youmightconsultwithyourbankandseeiftheycanreducetherequireddeposittoaminimum.W:Still,therewillbecertainbankcharges.ItwouldhelpmegreatlyifyouacceptD/AorD/P.Youcandrawonmejustasiftherewerealetterofcredit.Toyouitmakesnogreatdifference,buttomeitdoes.L:Well,Mr.Wood,youmustbeawarethatanirrevocableletterofcreditgivessellertheadditionalprotectionofthebanker'sguarm~tee.WealwaysrequireL/Cforourexports.Andontheotherwayaround,wepaybyL/Cforourimports.W:Tomeeteachotherhalfway,whatdoyousayto50%byIMCandthebalancebyD/P?L:I'mterriblysorry,Mr.Wood,butI'mafraidIcannotpromiseeventhat.AsI'vesaid,wedorequirepaymentbyL/C.However,togetaroundyourdifficulty,I'dsuggestthatyoureduceyourorderbyhaft.Youcansendinanadditionalorderlater.W:Well,I'llthinkitover.Bytheway,whenmustIopentheL/C,ifIwantthegoodstobedeliveredinMay?L:Amonthbeforeshipment.W:Well,Mr.Liu,You'vepromisedtomakedeliverywithintwomonths.Ifyoucanadvancedeliveryforamonth,Iwon'treducemyorder.IwilltakethefullquantityyouofferedandarrangeforL/CassoonasIgethome.L:Youmaybeassuredofthat.We'llbookyourorderandinquirefortheshippingrightawaysothatshipmentcanbeeffectedwithintwoorthreeweeksafterreceiptofyourL/C.IsthatOK?W:Thatwillbefine.Iappreciateyourcooperation.