Welcome to our

presentation
Group 9:

Mai Tuyet Chinh

Le Thi Thuy
Nguyen Thi Thanh Loan
Nguyen Linh Chi
Bui Thi Huong
Ha Tung Lam

THE FIVE STEPS IN

NEGOTIATING PAYMENT

Contents
Part 1

General principle of
payment negotiation

Five basic steps in

Part 2
negotiating payment

Part 3

Practise exercises

Terms of payment

Terms of payment

Terms of payment
Cash in advance
Cash on delivery

Demand

Deferred payment period of

30 days or more

Etc

DISTANCE ???

Five steps in negotiating payment

Step 1: Mode of payment

How will
payment be
made?

Step 1: Mode of payment

International trade is conducted by
many ways, for example :

In traditional trade

Step 1: Mode of payment

IN PRIVATE LIFE

CASH AGAINST
INVOICE

Step 1: Mode of payment

Cash in the international trade

Choice of method of payment

Step 1: Mode of payment

Level of security

STEP 2: TIMING

DATE OF PAYMENT

SELLER

BUYER
DELAY

USE OF
MONEY

BORROW MONEY
WITH AN INTEREST
RATE

SELLER:
IMPROVE CASH
FLOW

BUYER: GET A
LOWER PRICE

The date of payment for a single sale

is simply regulated.
It also depends on method of
payment: Before on after
delivery.

STEP 3

PLACE OF

Step 3: Place of payment

Under the Vienna Sales
Convention 1980, payment is
deemed to be made only when
the cash is available at the
Sellers place of [business]

Step 3: Place of payment

Payment should be deemed to have be
made only when the contract sum is paid
into the Sellers bank account and is at the
Sellers full disposal

Step 4: Delay

Any payment
made after the
agreed date of
payment

Step 4: Delay
Excused delay:
* during a grace period
* more commenly by a
force majeure event
Fact:
Most exporters dont
want to accept any
delays.

Step 5: Results of delay

the bank interest he must pay while waiting for

his money

Step 5: Results of delay

`
This interest
should be
compensated
to him by the
buyer under
the terms of
the contract

Step 5: Results of delay

A typical contract clause mentioning
delayed payment:

If payment of any payable sum is

delayed, the Buyer shall be entitled to
receive interest on the amount unpaid
during the period of delay. The interest
shall be at an annual rate threepercentage points above the discount
rate of the central bank in the Sellers
country

Step 5: Results of delay

How to avoid late payment for the exporter???

Payment shall be made by an irrevocable,

confirmed, at-sight letter of credit. The buyer shall
open the letter of credit on or before 9th
December 2015 on the terms agreed by the
parties and annexed to this contract as appendix.
Any discrepancy between the terms agreed by
the parties and the letter of credit as issued shall
be notified by the buyer to the seller immediately.

Payment shall be made by an

irrevocable, confirmed, at-sight letter
c of credit. The buyer shall open the
dn letter of credit on or before 9th
chiu tiDecember 2015 on the terms agreed
by the parties and annexed to this S sai
contract as appendix. Any
khc
discrepancy between the terms
agreed by the parties and the letter of
credit as issued shall be notified by
the buyer to the seller immediately.
Di
dng
ph lc

Vic thanh ton phi c thc hin bng mt tn

dng th c xc nhn tr tin ngay khng th hy
ngang. Ngi bn phi m th tn dng vo ng
hoc trc ngy 9 thng 12 nm 2015 theo cc iu
khon tha thun bi cc bn v c dn chiu ti
hp ng ny di dng ph lc. Bt k mt s sai
khc no gia nhng iu khon tha thun bi cc
bn v tn dng th c lp phi c thng bo
cho ngi bn ngay lp tc.

Nu Bn thu t vn khng thanh ton trong

thi hn nh tha thun, ngoi tr nhng
ha n hoc s tin cn ang tranh chp, th
Bn thu t vn s phi chu trch nhim tr cho
Bn t vn mt khon tin li i vi s tin qu
hn t ngy ht hn thanh ton n ngy thc
tr trn c s t l li sut p dng vi ng
Vietnam do Ngn hng Nh Nc cng b ti
thi im thanh ton.

 Bn thu t vn

the Principal

ang tranh chp

in disputes

s tin qu hn

the amount overdue

ngy ht hn thanh ton the due date

ngy thc tr

the actual date of payment

If the Principal fails to settle the payment within

the period as agreed upon, except for any
amount/invoice in disputes, then it shall be liable
to pay to the Consultant an interest on the amount
overdue from the due date until the actual date of
payment on the basis of the interest rate
applicable to the Vietnam dong published by the
State Bank of Vietnam at the time of payment.