Terms used in commercial parlance :
It would be useful to know and understand the terms and contents of documents used in the International Trade transactions.
| (1) Invoice | This is the basic commercial document showing particulars regarding description of goods
– quantity and unit price – discounts and net price – names of consignor and consignee – payment particulars. – Contract or acceptance of order on the basis of which the goods are supplied. |
| (2) Packing specification | Giving particulars of the contents of each of each of the package in the consignment. |
| (3) Certificate of Origin | A certificate issued by the competent authority in the country of manufacture giving the extent of the manufacture in that country. |
| (4) Bill of Lading | A negotiable document given by the carriers of the cargo giving particulars of
(a) Port of shipment (b) No. of packages covered by the consignment (c) Marks and numbers on the page (d) Name of the vessel in which the goods have been dispatched (e) Name of the consignee of the goods, (f) whether the freight has been pre-paid or is to be collected at the destination. It is a negotiable document which has to be surrendered to the carrier for getting delivery of the goods. |
| (5) Air Consignment Note | It is a document corresponding to Bill of Lading, in the case of cargo imported or exported by air. |
| (6) Indent | It is a document showing the particulars of the consignment for which the buyer has placed an order with the supplier. It normally gives particulars about (i) full description of the goods (ii) unit price (iii) mode of payment (iv) quantity required (v) delivery instructions. |
| (7) Quotation | It is a document, which indicates the price, the terms and other conditions on which the seller is willing to supply goods to the buyer. |
| (8) Acceptance | It refers to the formalisation of the contract of sale between the buyer and the seller. Once the seller of the goods sends his acceptance of the order of the buyer (the indent) the contract is complete. The acceptance will inter alia contain particulars of description of the goods to be supplied, unit price, including discounts and other charges, time and terms of delivery, penal clause for breach of contract, agreed terms of payment |
| (9) Letter of Credit | This is an instrument delivered by the bank intimating the seller that the buyer has instructed the bank and the bank will according to these instructions pay the seller of the goods, the bill amount for the supply of the goods on presentation of certain documents evidencing shipment of the goods. |
| (10) Sight draft | A document evidencing the amount of money paid for the importation. |
| (11) Delivery Order | An authorisation given by the local agent of the carriers, on surrender of the original negotiable copy of the bill of lading or air consignment note, directing the custodian of the cargo to deliver the consignment to the importer or his agent. |
| (12) Mate‘s Receipt | A receipt given by the First mate or First officer or cargo supervisor of the conveyance certifying the total quantity of the consignment received on board the vessel or the aircraft. A bill of lading or air consignment note is issued by the agent of the Carrier Company on surrender of the mate‘s receipt. |
| (13) Retirement of documents | The original negotiable copies of the shipment documents like invoice, packing specification, certificate of origin. |
| (14) Non-negotiable documents | Since retirement of the original document takes time, non negotiable documents are given to the importer to facilitate clearance. |
| (15) Landing charges | The port authorities have to pay for
(i) Unloading the cargo from the conveyance; (ii) Light house charges (iii) Forklift, warehouse crane charges if they are used for landing. |
| (16) Boat/Lighterage Charge | Some times the vessel is unable to get a berth alongside the quay in the harbour. The goods are then transported from the ship to the shore by boats / lighters. The charges paid therefore are called Boat / Lighterage charges. |
| (17) Custom House Agent | Since the importers / exporters may not be able to devote time and energy to clear imported goods or export goods, and since it involves running about to several organisations apart from customs, like Port, Trust, steamer agents, insurance companies, the assistance of agency organisation having adquate technical knowledge and expertise has been provided in the form of custom house agents. |
| (18) Insurance cover | It is customary to insure all goods in the course of international trade. The general cover relates to risk on account of loss, pilferage, fire, storm etc. However loss of goods on account of seizure of goods due to war, is a separate cover. It is therefore customary to refer to the insurance as marine risk insurance and war risk insurance. The policy and cover of such insurance is a relevant document for valuation. |