Lesson10 DP/DA

Lesson 10 Specimen 1 Asking for D/A Payment Terms

 

Dear Mr. Wu,

Re: Ladies’embroidered slippers

 

Thank you for your letter of June 7, in which we have concluded a transaction of 2,000 pairs of ladies’ embroidered slippers. But to our regret, you still ask for payment by irrevocable L/C as a rule.

 

Payment by irrevocable L/C is rather inconvenient to a customer like us who places medium-sized orders. It will add to our cost and undoubtedly tie up our liquid funds for three or four months. This may cause delay in execution of the contract.

 

In view of our business relationships and the small amount involved in this transaction, we hope you will extend us easier payment terms as an exception, i.e. payment by D/A. Your accommodation would be conducive to future business and facilitate us promoting your products in our markets.

 

 

We shall highly appreciate your kindness in consideration of the above request and giving us a favorable reply.

 

Yours truly,

Michael Evans

Manager

Specimen 2 Declining D/A Terms and Proposing to Pay by D/P

Dear Mr. Evans,

Re: Ladies’ embroidered slippers

 

We receive your letter dated June 10 about 2,000 pairs of ladies’ embroidered slippers, asking for D/A terms. We are so regretful to inform you that we are unable to accept your request, which is not our usual practice, as this will also tie up our funds.

 

We generally do business with clients on the basis of sight L/C, as L/C terms give us guarantee. However, in consideration of our future business we are prepared to extend you D/P at sight so as to ensure timely collection of the proceeds. We believe you can understand us fully. A sight draft will be drawn on you through Bank of China, Guangzhou Branch in due time.

 

It is necessary for us to make it clear that this concession is only for your convenience to push sales of our new products, which should in no case be taken as a precedent.

 

Yours truly,

Wu Gang

Manager