key_to_Unit_11

Unit 11

Payment of Goods

Key

I. T

rue or false

1.

T

2.

T

3.

F

this is a discrepancy between the contract and

the covering L/C.

4.

T

5.

F

this

“

more

or

less

“ tolerance

does

not apply

when”

the

Credit

stipulates

the

quantity

in

terms

of

a

stated number of packing units or individual items.

6.

F

according to article 42of the UCP 500, a freely

negotiable credit does not need to “ stipulate a place for

negotiation.”

7.

F

article

43of

the

UCP

500

also

states

:”

……

if

no

such

period

of

time

is

stipulated,

banks

will

accept

……

”.

Here

the

L/C

stipulated

an

expiry

date

of

the L/C, the presentation of documents, therefore, should

not exceed that date (September 15)

8.

T

9.

F

article

11

of

the

UCP

500

reads

:”

if

a

bank

uses the services of an Advising Bank to have the Credit

advised

to

the

Beneficiary,

it

must

also

use

the

services

of the same bank for advising an amendment.

10.

T

11. T

12.

F

on CFR,CPT or

FOB terms,

it is the buyer who

must

insure

the

goods

and

pay

the

insurance

premium

involved.

13. F

according to Item of article 13 of the UCP 500:”

documents

which

appear

in

their

face to

be

inconsistent

with one another will be considered as not appearing on

their

face

to

be

in

compliance

with

the

terms

and

conditions

of

the

Credit

,”

discrepancies

between

the

documents themselves are not allowed.

14. F

banks

won’t

refused

to

effect

payment,

as

is

stated

in

article

13

of

the

UCP

500,”

documents

not

stipulated in the Credit will not be examined by banks. If

they

receive

such

documents,

they

shall

return

them

to

the presenter or pass them on without responsibility.”

15. F

the

time

allowed

for

examining

and

negotiating

the

documents

is

seven

banking

days,

as

is

indicated

in

article

13(b)of

the

UCP

500:”

the

Issuing

Bank

……

shall

each

have

a

reasonable

time,

not

to

exceed

seven

banking

days

following

the

day

of

receipt

of

the

documents,

to

examine

the

documents

and

determine

whether to tale up or refuse the documents and to inform

the

party

form

which

it

received

the

documents

accordingly.”

16. F

the

beneficiary

does

not

need

to

act

on

suggestions written in the L/C if they ate not indicated as

documents,

as

is

stated

in

article

4

of

the

UCP

500:”

in

Credit

operations

all

parties

concerned

deal

with

documents

and

not

with

goods,

services

and

/or

other

performances to which the documents may relate.”

17. T

18. T

19. F

the

beneficiary

must

present

all

the

originals

if

more than one original insurance policy has been issued.

This is clearly specified in

article 34 of the UCP 500 :”

if

the

insurance

document

indicates

that

it

has

been

issued in more than one original, all the originals must be

presented unless otherwise authorized in the Credit.”

20. F

a

Certificate

of

Origin

is

used

to

prove

that

a

certain

commodity

is

produced

and

manufactured

in

a

certain country.

II.

In

each

blank

space

write

a

word

that

fits

naturally:

method,

international,

letter,

ideal,

for,

trade,

gives,

starts, issue(open, establish), amount, and instructions,

transaction, sends, correspondent, On, correspondent,

credit,

usual,

confirm,

undertakes,

due,

forth(out),

with, knowing, money, secure, behalf, carried out

III. Payment and acknowledgement

A.

Read

the

bill

of

exchange

below

and

answer

questions.

1. Drawer: Henan nati

ve produce …

Drawee: Hanover Trust Co.

2. 4th DEC, 1999

3. two copies

4. US$$63,162.00

5.

Unite

States

Dollars

Sixty

Three

Thousand

One

Hundred And Sixty Two Only

6.

The

sender's

place

is

on

the

bottom

right

and

the

receiver's is on the bottom left.

7. 90 days

8. LC

1.

US dollars,

number,

letter of credit, company

B. Figures and words

1. one hundred pounds sterling only

2. eighty-nine dollars and fifty cents only

3. Yen eight hundred and sixty-eight thousands only

4. Two hundred and thirty-four pounds, four shillings,

and three pence only

5. Deutsche mark five hundred and ninety only

IV

.

Read

the

following

letters

regarding

payment

terms. Identify the writer, the term proposed and the

reason given. Then fill the Information Form.

Letter

Buyer/

No.

1

2

3

Seller

Buyer

Buyer

Seller

Term

proposed

CAD

凭单

Deal of small value

付款

T/T

电汇

CIA(not

COD

货到

付款

)

4

Seller

D/A

承

兑

To push sales

Assure the time of delivery

& save expenses

Usual practice

Reason

交单

5

6

V

.

Identify

the

problems

and

complete

the

letters

by

suggesting a solution.

1. increase the amount of your LC by $$600

LC amount is insufficient

2. make the necessary amendment to the LC so that the

currencies of the documents are the same.

discrepancy in currency

3. amend your LC as stated in your order

payment terms differ between LC and order sheet

4. amend your LC to read

discrepancy in terms of delivery

VI. VI.

Please the following bill carefully, and then fill

in the blanks with the questions given:

Key

(1)

The

name

of

the

issuing

bank

SAKURA

BANK,

Seller

Buyer

D/P< /p>

付

款

To expand business

交单

Consignme

Unable

to

make

purchase

nt

on his own