Welcome to our presentation

Group 9: Mai Tuyet ChinhLe Thi ThuyNguyen Thi Thanh LoanNguyen Linh ChiBui Thi HuongHa Tung Lam

THE FIVE STEPS IN NEGOTIATING

PAYMENT

Contents

General principle of payment negotiation

Five basic steps in negotiating payment

Practise exercises

Part 1

Part 2

Part 3

Terms of payment

Terms of payment

Demand

Cash in advanceCash on deliveryDeferred payment period of 30 days or more

Etc…

Terms of payment

DISTANCE ???

Five steps in negotiating payment

Step 1: Mode of paymentHow will

payment be made?

Step 1: Mode of payment

International trade is conducted by many ways, for example :

In traditional trade

Step 1: Mode of payment

IN PRIVATE LIFE

CASH AGAINST INVOICE

Step 1: Mode of payment

• “ Cash” in the international trade

Choice of method of payment

Step 1: Mode of payment

• Level of security

STEP 2: TIMING

DATE OF PAYMENT

SELLER

DELAY

BUYER

USE OF MONEY

BORROW MONEY WITH AN INTEREST

RATE

SELLER: IMPROVE CASH

FLOW

BUYER: GET A LOWER PRICE

The date of payment for a single sale is simply regulated.

It also depends on method of payment: Before – on – after delivery.

The date of payment for a single sale is simply regulated.

It also depends on method of payment: Before – on – after delivery.

STEP 3

PLACE OF

Step 3: Place of payment

Under the Vienna Sales

Convention 1980, payment is

deemed to be made only

when the cash is available

at the Seller’s place of

[business]

Step 3: Place of payment

“Payment should be deemed to have be

made only when the contract sum is paid

into the Seller’s bank account and is at the

Seller’s full disposal”

Step 4: Delay

Any payment made after the agreed date of payment

Step 4: Delay

Excused delay:

* during a grace period

* more commenly by a force majeure event

Fact:

Most exporters don’t want to accept any delays.

Step 5: Results of delay

the bank interest he must pay while waiting for his money

`Step 5: Results of delay

This interest should be compensated to him by the buyer under the terms of the contract

Step 5: Results of delay

A typical contract clause mentioning delayed payment:

“If payment of any payable sum is delayed, the Buyer shall be entitled to receive interest on the amount unpaid during the period of delay. The interest shall be at an annual rate three-percentage points above the discount rate of the central bank in the Seller’s country”

Step 5: Results of delay

How to avoid late payment for the exporter???

Payment shall be made by an irrevocable,

confirmed, at-sight letter of credit. The buyer shall

open the letter of credit on or before 9th

December 2015 on the terms agreed by the

parties and annexed to this contract as appendix.

Any discrepancy between the terms agreed by

the parties and the letter of credit as issued shall

be notified by the buyer to the seller immediately.

Payment shall be made by an irrevocable, confirmed, at-sight letter of credit. The buyer shall open the letter of credit on or before 9th December 2015 on the terms agreed by the parties and annexed to this contract as appendix. Any discrepancy between the terms agreed by the parties and the letter of credit as issued shall be notified by the buyer to the seller immediately.

Sự sai khác

Dưới dạng

phụ lục

Được dẫn

chiếu tới

Việc thanh toán phải được thực hiện bằng một tín

dụng thư được xác nhận trả tiền ngay không thể hủy

ngang. Người bán phải mở thư tín dụng đó vào đúng

hoặc trước ngày 9 tháng 12 năm 2015 theo các điều

khoản thỏa thuận bởi các bên và được dẫn chiếu tới

hợp đồng này dưới dạng phụ lục. Bất kỳ một sự sai

khác nào giữa những điều khoản thỏa thuận bởi các

bên và tín dụng thư được lập phải được thông báo

cho người bán ngay lập tức.

Nếu Bên thuê tư vấn không thanh toán trong

thời hạn như đã thỏa thuận, ngoại trừ những

hóa đơn hoặc số tiền còn đang tranh chấp, thì

Bên thuê tư vấn sẽ phải chịu trách nhiệm trả cho

Bên tư vấn một khoản tiền lãi đối với số tiền quá

hạn từ ngày hết hạn thanh toán đến ngày thực

trả trên cơ sở tỷ lệ lãi suất áp dụng với đồng

Vietnam do Ngân hàng Nhà Nước công bố tại

thời điểm thanh toán.

• Bên thuê tư vấn

• đang tranh chấp

• số tiền quá hạn

• ngày hết hạn thanh toán

• ngày thực trả

the Principal

in disputes

the amount overdue

the due date

the actual date of payment

If the Principal fails to settle the payment within

the period as agreed upon, except for any

amount/invoice in disputes, then it shall be liable

to pay to the Consultant an interest on the amount

overdue from the due date until the actual date of

payment on the basis of the interest rate

applicable to the Vietnam dong published by the

State Bank of Vietnam at the time of payment.