Documents against bank acceptance

Under these terms, the documentsrelating to a shipment of goods are released to a bank on acceptance of a documentary draft (time draft) drawn on it by the seller. Bank acceptances are first-class bills and can be dis­counted at a favourable rate.

When the terms of "documents against bank acceptance" have been agreed upon, the buyer instructs his bank to accept the seller's draft or to arrange for its correspondent in the seller’s country to provide the acceptance. (The latter procedure is the usual one.) Upon acceptance, the documents are handed over to the bank. The seller can get funds immediately by discounting the banker’s acceptance. The buyer, on the other hand, is required by his bank to provide cover before maturity of the bill.

Also see bill of exchange, discounting of bills.Compare D/A.

D/P(documents against payment)

Under D/P terms, the documents relating to a shipment of goods are released to the buyer on payment of a documentary draft (usually a sight draft) drawn on him by the seller.

Also see collection of documentary drafts. Compare C.O.D.

Draft

See bill of exchange.

Duplicate consignment note

See consignment note.

Endorsement

Instruments payable to order, for example, bill of exchange, order cheque, promissory note and order bill of lading can be transferred by endorsement.

Endorsements are placed on the back of the instrument. The person who writes the endorsement is called the endorser, the person to whom the instrument is endorsed is the endorsee. The most important endorsements are blank endorsement and special endorsment.

A blank endorsement consists only of the endorser’s signature; it turns an order paper into a bearer paper negotiable by delivery only.

John Smith   Blank endorsement

A special endorsement includes endorser’s signature, name of endorsee, and sometimes also the date. A blank endorsement can be converted into a special endorsement by writing Pay to the order of and the endorsee’s name above the signature of the endorser.

Pay to the order of William Brown. 17th June, 20… John Smith Special endorsement

ex works (ex factory, mill, plantation, warehouse, etc.)

Under ex works terms, the seller's and the buyer's duties are as follows:

The seller must place the goods at the buyer's disposal at his factory or warehouse and bear all costs and risks until the goods have been placed at the buyer's disposal. The buyer must take delivery of the goods and bear all costs and risks from the time when the goods have been placed at his disposal.

Also see Incoterms.

F.A.S.(free alongside ship)

Under F.A.S. terms, the seller's and the buyer's duties are as follows:

The seller must deliver the goods alongside the vessel named by the buyer and bear all costs and risks of the goods until they have been delivered alongside the vessel, either at the quay or by means of lighters.

The buyer must charter a vessel or reserve the necessary space on board a vessel and inform the seller of the name of the vessel, loading berth of and delivery dates to the vessel. The buyer must bear all costs and risks of the goods from the time when they have been delivered alongside the vessel.

Also see Incoterms.

F.O.B. (free on board)

Under F.O.B. terms, the seller's and the buyer's duties are as follows:

The seller must deliver the goods on board the vessel named by the buyer and bear all costs and risks of the goods until they have effectively passed the ship's rail at the port of shipment.

The buyer must charter a vessel or reserve the necessary space on board a vessel and inform the seller of the name of the vessel, loading berth of and delivery dates to the vessel. The buyer must bear all costs and risks of the goods from the time they have effectively passed the ship's rail.

Also see Incoterms.

F.O.R. / F.O.T. (free on rail / free on truck)

Under F.O.R / F.O.T. terms, the seller's and the buyer's duties are as follows:

In the case of a wagonload, the seller must obtain a wagon, load it, and deliver it into the custody of the railway. In the case of a load less than a wagonload, the seller must deliver the goods into the custody of the railway, either at the dispatching station or into a vehicle provided by the railway. The seller must bear all costs and risks of the goods until the wagon on which they are loaded, or the goods themselves, have been delivered into the custody of the railway.

The buyer must bear all costs and risks from the time when the wagon on which the goods are loaded, or the goods themselves, have been delivered into the custody of the railway.

Also see Incoterms.

forwarding agent (US also: forwarder, freight forwarder)

The main function of a forwarding agent is to arrange for the conveyance of goods to the agreed place of destination. He takes over the goods, delivers them to the carrier and — through his branch offices or correspondents — makes arrangements for transshipment, if necessary. Forwarding agents usually have their own lorries or vans and also transport goods themselves, for example, from consignor's warehouse to the railway station. Other services which forwarding agents render to their customers are: making up grouped consignments (US: consolidated shipments) and thus helping to save transport charges, providing storage space, obtaining the necessary shipping documents, taking out insurance, attending to customs clearance of goods, handling collections, etc. Cus­toms clearance and collections in foreign countries are arranged through the forwarding agent's foreign correspondents.

franco domicile (or: free buyer's address, US: F.O.B. buyer's warehouse)

Under these terms, the seller bears costs and risks until the goods have been delivered at the buyer's address.

Franco frontier

Under these terms, the seller bears all costs and risks until the goods reach the frontier or border.