Transactions take place on the basis of contract of sale. This is the selling and buying of goods between firms. Between seller and buyer are the terms. The principal stage of a transaction are: Enquiry, offer, order, confirmation of the order, execution of the order and payment.
First stage of a trasaction is a enquiry. The enquiry is a request for general information and quotations. Enquiries can be made by letter, by specially printed form, or verbally ti a sales representative over the telephone or at a trade exhibition. The names and addresses of suppliers may be obtained from: directories, catalogues, specialised magazines, Chambers of Commerce, etc…
Offers can be solicited or ansolicited. They are solicited when they consist in replies to enquiries. They are ansolicited when they consist in promotional or sales letters. Companies generally pay prompt attention to enquiries, supplying potential costumers with offers containing full imformation about goods.
Quotations include the price-list and other cost such as transport, freight, insurance and duties. The terms related to delivery are codified in an agreement recognised worldwide and called Incoterms.
Incoterms: ex works, free carrier, free alongside ship, free on board, cost and freight; cost, insurance and freight, carriage paid to, carriage and insurance paid to, delivered at frontier, delivered ex ship, delivered ex quay, delivered duty unpaid, delivered duty paid.
Ex works: the quoted price simply covers the cost of the goods at the seller’s premises. The buyer bears all costs and risks.
Free carrier: It means that the seller must hand over the goods, cleared for export.
Free alongside ship: it means that the seller must place the goods alongside the vessel on the quay or in lighters at the named port of shipment.
Carriage paid to: It means that seller pays the freight for the carriage of the goods to the named destination.
Delivered at frontier: It means that the seller must make the goods available to the buyer , cleared for export, at the named point and place at the frontier.
Delivered ex ship: It means that the seller has the obligation to make the goods available to the buyer on board the ship at the named port of destination.
Delivered ex quay: It means that the seller has the obligation to make the goods available to the buyer on the quay at the named port of destination, cleared for import.
Delivered duty paid: the seller must deliver the goods at the named place in the country of importation. The seller bears all the risks and costs including import duties or taxes.