METHOD OF FINANCING OF INTERNATIONAL
SALES OF GOODS
- Addressing financing in international trade, especially
international sales of goods
-International sales as contracts – signed by parties
whose place of business are in diff states
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2 TYPES OF FINANCING AGREEMENTS UNDER
INTERNATIONAL TRADE
1. documentary credits (letter of credit)
- payment security for goods and services
2. standby credits
- security against default in performance of principal in
contract
Bill of Exchange
- known as draft
- class of documents as negotiable instruments
-negotiable instruments – evidences the obligation to pay
money by one party to another
2 characteristics
1) transferable by delivery
2) transferee takes it in good faith
PARTIES IN DOCUMENTARY COLLECTIONAL
TRADE
1. THE PRINCIPAL (DRAWER)
S prepares collection documents and delivers them to bank
w/collection instructions
2. THE REMITTING BANK
S bank forwards documents together with S instructions to
collecting bank
3. THE COLLECTING BANK
Bank in processing of collection
4. THE PRESENTING BANK
- buyers bank which presents collection
5. DRAWEE
- buyer whom documents are presented for payment or
acceptance
Uniform Customs and Practice for Documentary Credits
- rules apply to any documentary credits
REGULATION OF INTERNAL SALE OF GOODS
Conflict of laws
Conflict of laws on contract form
- laws of different countries comprise different rules.$
Conflict of laws on the content of contracts
- law of different countries comprise different rules on the
various and complex issues, such as right and obligation
of parties.
