We spoke to your representative, Mr Chai, at the Earls Court Boat Show in London last week, and he showed us a number of dinghies which you produce, and informed us of your terms and conditions.
We were impressed with the craft, and have decided to place a trial order for ten of them, your Cat. No. NR17. The enclosed order, No. 90103, is for delivery as soon as possible as the summer season is only a few weeks away.
As Mr Chai assured us that you could meet any order from stock, we have instructed our bank, Northern City Ltd., to open a confirmed irrevocable letter of credit for £7,300 in your favour, and valid until 1 June 20—.
Our bank informs us that the credit will be confirmed by their agents, Cooper & Deal Merchant Bank, Pekin Road, Hong Kong, once you have contacted them, and they will also supply us with a certificate of quality once you have informed them that the order has been made up and they have checked it.
You may draw on the agents for the full amount of the invoice at 60 days, and your draft should be presented with the following documents:
Six copies of the bill of lading.
Five copies of the commercial invoice, c.i.f. London
Insurance certificate for £7,140 (A.R.)
Certificate of origin
Certificate of quality
The credit will cover the invoice, discounting, and any other bank charges. Please cable us confirming that the order has been accepted and the craft can be delivered within the next six weeks.
International Crafts Ltd.
Enc. Order No. 90103
Specimen letters: a documentary credit transaction (2)
From the importer to the exporter
This letter, from the buyer (importer) in London to the seller (exporter) in Hong Kong, is the first step in our second example of a documentary credit transaction. Note that International Crafts ask for a certificate of origin, which they need since they intend to reexport the dinghies to France, which is an EEC country. Note also that they will use their bank's agents to verify the quality of the boats.
From the exporter to the importer
Northern City Ltd., who are International Crafts' bankers, have now notified their agents in Hong Kong, Cooper & Deal, who have in turn advised Lee Boat Builders that the credit is available. Meanwhile Lee have cabled International Crafts confirming that they have accepted the order, and can deliver within six weeks. They follow this by sending this letter, advising shipment.
1. When will the consignment arrive in London?
2. How have the dinghies been packed?
3. What documents were required by International Crafts Ltd.?
4. What does '60 d/s' mean?
5. Who are Cooper & Deal, and what role do they play in the transaction?
6. What will the Northern City Bank advise International Crafts?
7. What restrictions do Lee Boat Builders put on their guarantee?
8. What must International Crafts do once they have received the consignment?
9. Which words in the letter correspond to the following: should arrive; small boats', boxes; pays for; send; warranty?