Business

13 Standard Terms of Sale

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We should introduce our self with standard terms of sale so, here are all terms of sale given:

Terms of sale

Terms

Meaning/Implication
1. F.A.S Free Alongside Ship-cost, carriage to docks and dock charges.
2. F.O.B Free on board-FAS plus charges for loading the goods on board the ship
3. C & F Cost and Freight- FOB Plus Freight charges up to the port of the importer.
4. C.I.F Cost, Insurance and Freight-C&F plus marine insurance charges. This is a common method of quotation and the price includes:

  1. Manufacturer’s price,
  2. Carriage to the Port,
  3. Port or Dock charges,
  4. Loading charges,
  5. Export Duty,
  6. Freight, and
  7. Marine Insurance.
5. Franco, Rendu or Free C.I.F plus import duty, port charges the importer’s port and conveyance charges form the port to the buyer’s place.
6. Ex-Ship All charges after the ship reaches the shore are to be paid by the importer. (It is almost similar to C.I.F price.)
7. Bill of Entry B/E enables the customs authorities to levy appropriate import duties. Different forms of B/E are used for free goods, dutiable goods and goods to be stored in Bonded Warehouse.
8. Bill of Lading The B/L is a contract of carriage and includes the terms and conditions on which the shipping company had accepted the goods for transportation.
9. Insurance Policy Marine insurance is compulsory in foreign trade. The origin document relating to marine insurance is also sent to the importer.
10. Invoice The document giving full details of goods being shipped is prepared by the exporter and sent to the importer.
11. Bill of Exchange Generally the exporter secures payment for his shipments thought a bill of Exchange drawn on the importer and sent through his (exporter’s) bank.
12. Shipping Advice After the goods have been shipped, the exporter sends a letter to the importer advising him of the dispatch of the goods, sailing to the ship and forwarding of the documents through the banker. This letter is called shipping advice.
13. Letter of Credit The importer has generally to obtain a letter of credit from his banker and send it to the Indent house or the exporter.

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