（十六） Terms of Payment
Teaching Objectives (教学目标):
After completing this lesson, students should be able to:
--talk about different modes of payment;
--understand the basic elements of an L/C;
--recommend the use of an L/C.
I. Discussion (课堂讨论): Work in pairs and think about:
1) Have you ever heard about L/C?
2) Why is L/C generally used in international trade?
3) Talk about various types of L/C and their differences.
II. Sum-up (总结归纳信用证定义、作用与种类)
1. What is L/C? (信用证的定义)
A letter of credit is a binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be transferred to the seller.
2. The stages of the issuing a letter of credit. (开立信用证的程序)
(1) The buyer and seller reach an agreement on terms.
(2) The buyer applies to his bank for issue of a letter of credit.
(3)This bank (the issuing bank) issues an L/C, sending it to the advising bank by airmail or electronic means such as telex or SWIFT.
(4)The advising bank establishes the authenticity of the letter of credit using signature books or test codes, then informs the seller.
(5)The seller should now check that the L/C matches the commercial agreement and that all its terms and conditions can be satisfied.
(6)The seller ships the goods and then assembles the documents detailed in the L/C.
(7)The documents are presented to a bank, usually the advising bank.
(8)The issuing bank now checks the documents itself.
(9)The issuing bank debits the buyer and releases the document so that the buyer can claim the goods from the carrier.
III. Listening practice: Listen and Imitate. (录音呈现和模仿操练)
1. You will hear an exporter talking about basic methods to receive payment for products sold abroad. Rank the following methods of payment in order from most secure for the exporter to least secure. Then listen and check your answers. (answers and script omitted)
2. Repeat the methods of payment:
1) cash in advance
2) letter of credit
3) document against presentation
4) payment through a bank account
5) other payment mechanism, such as “on consignment” where goods are sold usually by an agent on commission who then pays for the goods once they are sold.
Task 2: Presentation Listening
1. Listen to the passage about letters of credit and choose the correct answer to each question. (listening materials omitted)
2. Oral practice. (Imitate and model)
☆Currency for payment
How will the currency be exchanged?
Are there any currency restrictions in your country?
In what currency would you like the payment to be made?
We may have some difficulties with a payment in cash?
It’s our usually practice to make the payment via an L/C.
Have you taken the exchange rate into consideration?
What do you think of payment in pounds sterling instead of US dollar?
We’d prefer to receive payment in hard currency.
☆Method of payment
I wonder if you accept D/P or D/A?
What’s your usual practice concerning payment?
Could you possibly make and exception and accept a T/T transfer?
It would be a great help if you could accept D/D.
What mode of payment do you prefer?
What do you say if we make half the payment in cash and half via an L/C.
The only method of payment we can accept is an L/C/
As it’s our first transaction, we suggest 50% via an L/C and the balance by D/P.
We request an L/C at sight from all our customers.
The method of payment we usually adopt is payment via a confirmed and irrevocable L/C.
IV: Follow-up Practice (分角色对话练习)
1. Listen to the dialogue about the opening of an L/C between Linda Jones, the accountant with Italian BAK Export and Import Co,, and Brian Martin, a bank clerk. Then choose the correct answer to each question.
Step1: Learn new words: take charge of 掌管，负责 installment 分期付款
Step2: Choose the answers. 1) B 2) A 3) B 4) C
2. Role-play. Find a partner, and make a dialogue according to the following information. Try to find a solution for both parties to gain a win-win situation.
A: Since we have reached an agreement on the price, quality, quantity and packaging of the products, now let’s get down to talk about payment, OK?
B: Good idea. What terms of payment would you prefer?
A: Actually, an L/C payment is our general practice. The exchange rate is currently rather unstable and an L/C provides a guarantee of prompt payment from the bank. It’s also the generally accepted international practice.
B: That’s right. L/Cs are very common in foreign trade. But this time we suggest D/P payment for the following reasons: firstly, a D/P payment can reduce the cost and in turn allows a larger profit margin for both of us. Secondly, the order is quite large and our exchange quota is insufficient at present. Finally, we have a good credit rating in several banks. You can trust us!
A: That sounds good. But we still prefer L/C since it’s our general practice. Do you think you could apply for one?
B: Ok, maybe we can start with an L/C and then talk about D/P later on.
V. Play the video and make the role play (视听呈现和模仿操练)
Video 1: The buyer and seller discuss the terms of payment. (买卖双方讨论付款方式)
1. New words and Expressions:
lump sum payment:一次性付清 sincerity 真诚 line of business: 行业
payment by installment: 分期付款 cash on delivery: 货到付款
cash flow: 现金流
2. Pre-viewing: Read the following chart to have a rough idea of the video.
1) The following statements are extracted form the dialogue in the video. Watch the
video and put them in the right order.
Keys: (1) a (2) I (3) e (4) g (5) b (6) f (7) c (8) j (9) d (10) h
2) Watch the video again. Pay attention to the terms of payment proposed by the buyer and the seller respectively, and their responses to each other. Then fill in the blanks.
Keys: (1) lump sum payment (2) payment by installments (3) cash on delivery
(4) advance payment (5) 25%; final acceptance (6) one month
4. Post-viewing: Work in small groups. Find out more about terms of payment.
Talk about international modes of payment:
Deferred payment 延期付款 Progressive payment 分期付款
Payment on terms 定期付款 Payment agreement 支付协定
Payment order 付款通知 Payment by banker 银行支付
Payment by remittance 汇拨支付 Simple/clean payment 单纯支付
Payment in part 部分付款 payment in full 全部付款
Payment by installments 分期付款 payment respite 延期付款
Payment at maturity 到期付款 payment in advance 预付（货款）
Cash with order (C..W.O) 随定单付现 cash on delivery(C.O.D) 交货付现
Pay on delivery (P. O. D) 货到付款 payment in kind 实物支付
Payment for(in) cash 现金支付，付现
Video 2: Talk about basic elements and structure of L/C. (谈论信用证基本要素与结构)
1. New Words and Expressions:
Documentary credit: 跟单信用证 invoice value: 发票值
Packing list:装运清单 freight to collect: 运费到付
2. Pre-viewing: Read the following chart to have a rough idea of the video.
Step1: Watch the video and think about the basic elements of an L/C.
The basic elements of a letter of credit are:
A payment undertaking given by the bank (issuing bank)\
On behalf of the buyer (applicant)
To pay a seller (beneficiary)
A given amount of money
On presentations of specified documents representing the supply of goods
within time limits
These documents confirmation to terms and conditions set out in the letter of credit
These documents to be presented at a specified place
Step2: Watch the video again and complete the letter below. Pay attention to the structure of the letter.
Keys: (1) SB-87645 (2) fifty thousand U.S. Dollars; 50,000,00
(2) No. DEF-101 dated January 10,2006 (4) five (5) two
(6) Freight Prepaid (7) Pneumatic Tools (8) drive
(9) hose and quick couplings (10) allowed (11) IP/79370
(12) beneficiary’s (13) 15days (14) SB-87654 (15) drafts
4. Post-viewing: Work in pairs. Choose one of the following topics and discuss with
your partner. (open)
International modes of payment
Advantages and disadvantages different modes of payment
Basic elements of an L/C.
VI. Consolidation (重点句型模仿与巩固)
Payment by L/C
We require payment via a letter of credit.
For a new client, we can’t accept any terms of payment other than an L/C.
We’ll issue the L/C one month before the shipment.
Since the international monetary market is rather unstable, we always use L/Cs for
our business transactions.
Establishment an L/C
Please open a letter of credit in good time.
We required documentary credit to be opened at the People’s Bank of China.
When should we open the L/C if the goods are to be delivered before March?
Duration of the L/C
The expiration date of this L/C is the 1st of May.
What’s the validity period of the letter of credit?
The L/C will remain valid until the 15th day after shipment.
The L/C was cancelled due to the expiry of its validity.
Prepare in-class presentation on terms of payment.