Business English(Lecture 5).pdf

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Placing an order

Acknowledging an order

Making a sales contract

Receipt of L/C, Payment


Order Sheet

Order by letter

Signing offer


acknowledgement of an order

acceptance or confirmation of an order


using a standardized form of contract

drawing up sales contracts in duplicate


buyer countersigning the final offer

presented by the seller

sales contract can be replaced by the

order sheet with the seller's

confirmatory signature at the bottom




Remittance 送金

Advanced payment : 사전송금 事前送金

(cash with order)

Deferred payment : 사후송금 事後送金

(Delivery first, payment afterwards)

Telegraphic Transfer!!


Workflow of

advanced payment



exporter importer Exporter’s bank Importer’s bank


Workflow of

deferred payment


shipment ⑤ ③

exporter importer Exporter’s bank Importer’s bank


- banks providing safeguard for parties


- banks guarantee payment to the exporter

and goods to the importer

▶ These goals can be accomplished by the use of a document called

documentary letter of credit (L/C)


negotiate: 매입 買入

issuing bank: 발행은행 發行銀行

(also called opening bank or establishing bank) 개설은행 開設銀行

= importer’s bank

advising bank: 통지은행 通知銀行

(also called negotiating bank) 매입은행 買入銀行 = exporter’s bank


bill of exchange: 환어음 換於音

documentary bill: 화환어음 貨換於音 beneficiary: 수익자 受益人 = exporter

L/C is issued in favor of the exporter

applicant: 신청인申請人 = importer


(1) The applicant requests the issuing bank to establish L/C in favor of

the beneficiary after a sales contract has been made.

(2) The issuing bank sends the L/C


(3) The advising bank notifies

the exporter of the arrival of L/C. (4) The exporter confirms the L/C

and picks it up.

(5) The exporter draws B/E and attaches to the bill documents required in L/C, such as invoice, packing list, B/L,

insurance policy and certificate of origin after the shipment has been completed.


(6) The exporter requests his bank to negotiate the documentary bill or


documentary bill:

bill of exchange with various documents attached to it


(7) The negotiating bank checks if all the documents are presented as stipulated

in the L/C and if there are any errors in

the documents drawn up.

And if they find that everything is OK, they pay the exporter.


Irrevocable L/C

Confirmed L/C

At sight L/C


Two types of L/C

according to payment time

(at) sight L/C: 일람불신용장 (一覽拂 信用狀) Usance L/C: 기한부신용장 (期限附信用狀)




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