Block 2. Discussing problems arising out of contractual obligations

LEAD-IN

• What problems can an exporter encounter when executing sales contracts?

• What can be done if there is a delay in payment?

• Can delays in payment be avoided?

• Can delays in delivery be avoided?

• What errors can occur when goods are invoiced?

• In what ways are problems connected with non-execution of contractual obligations settled?

• What style is preferable when writing a letter describing the circumstances preventing you from timely execution of your contractual obligations?

• In what style should a reply be given?

FOCUS 1

Letter 1 (Modified guarantee period)

November 10, 20...

Dear Ms. Earle,

We have received your letter dated November 1, 20… for which we thank you. We are taken by surprise to learn that you mistakenly believe that our guarantee period is 24 months.

We have to remind you that the guarantee period of our equipment is 18 months. We guarantee that the equipment is free from defects in material, design and workmanship and it conforms to our highest standards. No other guarantees are implied.

Should the equipment prove to be defective during the guarantee period we undertake to replace or repair any defective part free of charge within the period of 2 calendar months of the date of shipment provided that the defective part or parts have been returned to our plant, carriage paid. The guarantee shall not apply to damage due to negligence or improper handling on the part of the Buyer or to any other causes outside our control.

We hope the information provided won’t fail you. Please, acknowledge receipt.

Sincerely yours,

Luis Brogan

Sales Director

LETTER 2 (Asking for replacements)

November 14, 20…

Dear Mr. Douglas

Our forwarding agents informed us yesterday that two out of the twelve cases of stationary dispatched on November 9 were delivered damaged on the outside. They look as if some dark liquid has soaked into paper and stained most of the goods. Our agents opened the cases and found that all note-books were damaged so we cannot offer them for sale.

Will you therefore please arrange to send replacements without delay and charge them to our account? We realize that the responsibility for the damage is not with you and we have already taken up the matter with the carrier.

Sincerely yours,

Alfred Addison

LETTER 3 (Covering letter accompanying an invoice)

March 4, 20…

Dear Sirs

We enclose our invoice number 125 for computer accessories supplied against Contract no. 1051. The goods were dispatched in 10 crates (nos. 67-76) to your address by rail, carriage paid. We hope the consignment will reach you in good condition.

If you settle the account within three months, we will grant you a special cash account of 2½% off the amount due.

We look forward to hearing from you soon.

Sincerely yours,

Paula Parker

Accounts Department

LETTER 4 (Informing of errors in invoice)

February 5, 20…

Dear Mr. Thornton

We have received your statement for kitchen utensils dated January, 20… . On checking it we notice the following errors:

1) The sum of €180.00 for the return of the plastic cases covered by your credit note no. 432 dt January 12, 20… has not been entered.

2) Invoice no. 54-45 for € 12,500 has been debited twice: once on January 4, 20… and again on January 15, 20… .

After making all appropriate corrections we enclose our cheque for € 35,000 in full settlement. Please, acknowledge receipt.

Sincerely yours

Malcolm Lynn

LETTER 5 (Delay in submitting technical documentation)

July 21, 20…

Dear Ms. Lyman

We have received your formal notice of claim where it is stipulated that we have infringed the provision of Contract no. 23529 as regards the time of submission of the technical documentation.

We have carefully examined your claim and we insist that the delay in submitting the documentation occurred through no fault of ours. We were to submit the technical documentation within one month of delivery of the equipment. But we would like to remind you that Para 5 of the above contract provides for the documentation to be handed in only after you open LOC before June 12; actually it was opened only on July 15, i.e. over a month overdue.

Thus, we have to state that you have made a breach in respect of terms of payment, which in its turn has caused the delay in submitting the technical documentation and consequently you can hardly hold us responsible and make a claim on us for the damages suffered.

We hope this letter will settle it all right and will not bring us to a misunderstanding.