Offer of a compromise

In this case Mr Bishkin, the supplier, has the legal right to present the bill to his bank for payment, then if the bill is not met, call a notary public (a lawyer) to protest the bill, i.e. prevent the drawee (the person who would pay) from denying the bill was presented for payment, or dishonouring (not paying) the draft. The costs of this procedure are paid by the customer. However, the customer in this case has not said he will not pay, but cannot pay at present. If the supplier forced his customer to pay, the result might be bankruptcy, and all Mr Bishkin will get is a percentage of his customer's debts like other creditors. This could be as small as 5% of the total debt. So Mr Bishkin would be reluctant to force the bill on Mr Franksen. On the other hand, he has waited long enough for his money, and cannot be expected to wait another 60 days, even with the interest offered. So in his reply to Mr Franksen he offers a compromise.

Questions

1. Is Mr Bishkin sympathetic to Mr Franksen's problem?

2. What compromise does he suggest?

3. Why does he say he cannot wait a further 60 days for payment?

4. Does he want the 6% interest added on?

5. How will he know that Mr Franksen has accepted his offer?

Zenith S.A.

Haldenstrasse 118,3000 Bern 22, Switzerland

Tel: Bern 30172

Fax: Bern 82357

Mr L. Franksen 23 May 20—

L. Franksen PLC

Prince of Wales Road

Sheffield S9 4EX

UNITED KINGDOM

Dear Mr Franksen,

Bill No. BE 7714

I was sorry to learn about the embargo your country has placed on exports to Zurimba and of the problems this has created. However, the above bill has already allowed credit for 40 days, and although I appreciate your offer for an additional 6% interest on the £4,360 outstanding, it is financially impossible to allow a further 60 days credit as I myself have commitments.

I think the following solution might help us both.

You need not add interest on the present amount, but I have enclosed a new draft (BE 7731) for £2,180 which is half the outstanding balance, and will allow you 40 days to pay it. But I expect you to pay the remainder viz. £2,180 by banker's draft,

Please confirm your acceptance by signing the enclosed bill and returning it to me with your draft by return of post.

I wish you luck with your negotiations with the Brazilian importers and hope that this setback will soon be resolved.

Yours sincerely,

Bishkin

End. Bill BE 7731

HOMEMAKERS Ltd.

54-59 Riverside, Cardiff CFl 1JW

Telephone: 10222) 49721 Registered No. Cl 35162

Telex: 38217

R. Hughes & Son Ltd. 20 November 20—

21 Mead Road

Swansea

Glamorgan 3ST 1DR

Dear Mr Hughes,

I am writing to ask why you have not settled our invoice No. H931 for £519.63, a copy of which is enclosed.

I know that since we began trading you have cleared your accounts regularly on the due dates. That is why I wondered if any problems have arisen which I might be able to help you with. Please let me know if I can be of assistance.

Yours sincerely,

R. Cliff

6.6.5

First request

Below is an example of a first request. See 3.3.5 and 4.3.6 for other examples of correspondence between these two firms.

6.6.6

Date: 2016-01-03; view: 1089