Business Talks. Discussing Terms of Delivery

Business visits are very important in development of trade relations between countries and companies. Personal contacts are the most efficient means of promoting a better understanding in all spheres of human activities.

Normally businessman contact through correspondence or telephone calls, but, of course, main problems may be solved more efficiently through a personal meeting. During the talks the partners have an opportunity to discuss all problems face-to-face, and to come to an agreement more easily.

It is common for the Buyers to visit the Sellers for technical or commercial discussions. During such visits the Buyers are shown around the Sellers’ premises and workshops. They have a chance to see the equipment in operation, to be present at the tests. If the Sellers offer any modifications in the equipment, the Buyers can see them, discuss and approve immediately.

The Sellers often visit the Buyer’s premises when they need to revise some contract terms or draw up a new contract with their regular customers.

The Sellers and the Buyers can meet to discuss different claims if they appear in the course of fulfillment of the contract.

But, of course, the most popular reason for business people to meet is making up a contract.

When businessmen make a contract, they clarify a lot of important matters, such as prices for the goods, discounts, quality requirements, terms of payment, shipment and delivery, packing and marking, insurance, force majeure, claims and sanctions.

Terms of delivery can be a subject of long discussions because the price for the goods always depends on the terms of delivery.

In foreign trade goods are transported by different means: by sea, by air, by railway, by road.

The most popular terms of delivery in foreign business transactions are Incoterms, these are International Commercial Terms. Here are some of them.

Ex-works means the minimum responsibility for the Sellers. All the Sellers must do is to make the goods available at their premises. The Buyers collect the goods at their own expense, that is, the Buyers provide the transport facility themselves.

FOB means Free On Board. Under this term of delivery the Sellers ship the goods on board a ship at the port of shipment. After that the responsibility for the goods is transferred to the Buyers.

CIF means Cost, Insurance and Freight. According to this term the Sellers must deliver the goods to the port of destination and they are responsible for the cost of the goods, their insurance and freight (that is, transportation).

CAF means Cost and Freight. If you buy the goods on this term, the price will include the cost of the goods and transportation to the port of destination. But you must insure the goods at your own expense.

FOR means Free on Rail. The price for the goods includes the transportation expenses. The Sellers must deliver the goods to the railway station in their country. This term is used when the goods are shipped by rail.

When the partners come to an agreement on all the conditions, including terms of delivery, they sign a contract.

Study and learn the following vocabulary on the topic:

1 business visits – деловые визиты

2 development [ ] – развитие

3 trade relations – торговые отношения

4 the most efficient means – наиболее эффективный способ

5 better understanding [ ] – лучшее взаимопонимание

6 sphere [ ] – сфера

7 human [ ] activities – деятельность человека

8 to have an opportunity [ ] – иметь возможность

9 face-to-face – с глазу на глаз

10 agreement [ ] – соглашение

11 premises [ ] – помещения

12 workshop – цех

13 to see the equipment in operation – видеть оборудование в действии

14 to be present at the tests – присутствовать на испытаниях

15 approve [ ] – принимать, одобрять

16 to revise [ ] – пересматривать

17 draw [ ] up – составлять

18 claim [ ] – претензия

19 in the course [ ] of fulfillment [ ] of the contract – в ходе исполнения контракта

20 to clarify [ ] – прояснять

21 quality [ ] requirements [ ] – требования по качеству

22 packing [ ] and marking [ ] – упаковка и маркировка

23 insurance [ ] – страхование

24 force majeure [ ] – форс мажор

25 International Commercial Terms – международные правила толкования торговых терминов

26 Ex-works – франко-завод

27 to collect [ ] – забирать

28 at their own expense [ ], [ ] – за свой счет

29 FOB means Free On Board – ФОБ, франко-борт. По этим условиям продавец грузит товар на борт судна в порту отгрузки, после чего ответственность за товар переходит к покупателю.

30 the port of shipment – порт отгрузки

31 to transfer [ ], [ ] – передавать

32 CIF means Cost, Insurance and Freight – СИФ, стоимость, страхование и фрахт

33 port of destination – порт назначения

34 cost – стоимость

35 CAF means Cost and Freight – КАФ, стоимость и фрахт

36 FOR means Free on Rail – франко железнодорожная станция

Answer the following questions on the text:

1 What is the most efficient means of promoting a better understanding in all spheres of human activities?

2 How do businessmen normally contact?

3 What opportunity do the partners have during the talks?

4 What for do the Buyers visit the Seller’s premises?

5 What can they see during such visits?

6 For what purpose do the Sellers visit the Buyer’s premises?

7 What business matters do businessmen discuss when they make a contract?

8 What does the price for the goods always depend on?

9 What are the most popular terms of delivery in foreign business transaction?

10 What does ex-works mean?

11 What does FOB price cover?

12 What does CIF mean?

13 What does CAF mean?

14 What does FOR price include?

UNIT 6