The terms of payment are important for both the seller and the buyer.
For the seller, the best terms would be full payment 1 cash at the time of sale. But the buyer would prefer to have the goods before making payment.
Importers and exporters are separated from each other by 2 of miles. This adds to the difficulties of 3 an agreement of payment. However, exporters and importers usually meet each other half-way and agree to payment by a Letter of Credit.
A letter of credit (L/C) is a banker’s guarantee that payment will be made, if all the required shipping documents are presented.- In this way, exporters receive a guarantee not only from importers, but also from a bank.
- On 4 hand, importers are given the guarantee that the bank will not make payment unless all the shipping documents are presented.
Nevertheless, the exporter can further require an 5 letter of credit. That means the guarantee of payment cannot be cancelled either by the opening bank or the importer.__1__(完形填空)
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