Terms of Delivery

Every contract contains a clause defining transport conditions. The clause specifies terms of delivery (CIF, FOB, FAS, C& F, FOR, ex works and others), mode of shipment (by sea, rail, road, air or pipeline) and responsibilities of each party.

Most frequently used terms of delivery are CIF (cost, insur­ance, freight) and FOB (free on board). A CIF price includes not only the value of the goods, but the sum paid for insurance, freight and all other transportation expenses up to the place of destination.

A FOB price is lower. It includes the value of the goods and all expenses until the goods are on board the ship (plane, carriage or car).

Other terms of delivery which may be used are ex works, ex factory, ex warehouse. In this case the Buyer pays for all and ar­ranges all transportation and insurance of goods from the Seller's premises.

The choice of the terms of delivery as a rule remains with the Buyer. While negotiating the contract the Buyer chooses the terms of delivery which are suitable for them.

Transport by sea is essential to many contracts. As a rule, a few parties are involved: shipper (usually a manufacturer who sends goods), ship-owners, forwarder (an agent specializing in the trans­port of goods), stevedore (a firm employed in loading vessels), port authorities, consignee and others.

Freight services are provided by liners and tramp ships. Liners provide services over definite routes, operate in accordance with schedules and call at regular ports. Tramp vessels go anywhere as long as cargo is offered in sufficient quantity. Shipments by tramp vessels are governed by an agreement between the carrier and the charterer called a «charter party». -•

Either shipper or consignee, depending on the terms of the con­tract, pays freight, loading, discharging and other expenses, if any.

4. Put questions and make up a logical plan to each text. Retell the texts concentrating on its main topic.

Business Correspondence

Business transactions usually start with inquiries. As a rule, the prospective Buyer gets the name and address of the prospective Seller either at an exhibition, from an advertisement, on a televi­sion or radio commercial. All these channels of information and advertising are very important. Inquiries can be sent by mail, by telex or by fax. Sometimes inquires can be made orally, by phone.

In the inquiry the prospective Buyer states in what goods ex­actly he is interested and asks for the details of the price and terms of sale. When the Buyer wants to know at what price and on what terms he could buy the goods required by him, he usually sends out inquiries to firms, companies and organizations manufacturing such goods or dealing with them. Often the Buyer asks the Seller to send him (to enclose with the offer illustrated catalogues, price lists or other publications and, if possible, samples or pat­terns of the goods he is interested in. When asking the Seller to send him a quotation (or to make him an offer) the Buyer gives a detailed description of the goods required by him.

After considering the inquiry for some time the prospective Sell­er sends an offer in reply. The offer expresses the wish of the Seller to sell the goods. But it's not a legal document and the Seller may for this or that reason decide not to sell. The offer is only the first step in a contract. The offer usually quotes the price and stipulates terms of delivery and some other necessary details.

The Sellers may offer their goods to their regular customers or to those who may be interested in them without waiting for an in­quiry. These are voluntary or free offers. They were formally called without obligation (or engagement). This kind of offer does not bind the Seller and therefore may be made to several potential Buyers.

Then there are firm offers (binding or with obligation or en­gagement). A firm offer is made by the Seller to one potential Buy­er only and usually indicates the time during which it will re­main open for acceptance. If the Buyer accepts the offer in full within the stipulated time, he is obliged to buy the goods at the price and on the terms stated in the offer. The Sellers have the right to withdraw a firm offer at any time before it has been accepted.

There are also some other types of business letters (claims, for instance, etc).

1. Answer the following questions to discuss the details of the text. Use the text for reference.

1. What are the two main types of business letters?

2. What kind of business letters do business transactions usually start with?

3. Where does the prospective Buyer get the name and address of the prospective Seller?

4. How can inquiries be made?

5. What does the prospective Buyer state in the inquiry?

6. To what firms does the.Buyer send his inquiries?

7. What does the Buyer ask the Seller to send him?

8. What kind of business letter does the prospective Seller send in reply for inquiry?

9. What does the offer usually quote and stipulate?

10. May the Seller offer his goods to the Buyer without waiting for an inquiry?

11. What are the two main types of offers?

12. What's the difference between these two types of offers?

2. Read the text very attentively. Divide it into logical parts and make up a plan. Retell the text using the material of the tasks above.

3. Read the texts with a diction­ary. Make a list of new words.