Full name: Lê Quang Tiến

Student ID: 1701015870

Unit 4

B. Vocabulary

1. B 2. F 3. J 4. G 5. A
6. E 7. C 8. D 9. H 10. I

C. Reading

Reading 1

1. Risks that possibly arise in international trade can be devided into many
categories including risks relating to the quantity and quality of the goods
exchanged, risks in payment which are the two most common issues in foreign
transaction and a variety of different problems beside.

2. Payment in international trade can be made by different methods, for example,

open account, Advance payment, Clean Collection, Guarantee, Documentary
collection and Letter of credit.

3. Banks have a crucial function in the chain of international payment that directly
or indirectly involve in the payment process between the Importer, Exporter and
even other parties in the contractual relationship.

Reading comprehension task

Understanding main points

1. Open account

2. Bills for collection

3. Documentary Credit

4. Advance payment

Understanding details
 1. F 2. F 3. T 4. F 5. F
6. F 7. T 8. T 9. F 10. T

Word search

1. undertaking

2. consignment

3. intermediary

4. maturity

Reading 2

1. D 2. C 3. A 4. B 5. K

6. I 7. E 8. H 9. G 10.F

D. Exercise

Exercise 1

1. B, C, D

2. A, D, F, G

3. B, C, E, F

4. F

Exercise 2

1. 2. 3. 4. 5. 6. 7.

draw forward dispatch present accept/ dishonour remit

release

E. Extension activities
1. – Open account: low quality of goods, high bank charges. This is the most
secure payment method for the Buyer.

- Documentary Credit: low quality of the goods as they have to make payment
when the seller fully comply with the conditions in the LC regardless the result of
inspection at the destination.

- Bills for Collection: the exporter can retain the control of BL which can be
deemed as the title of the goods so the importer may not be able to receive the
goods at the destination port at their best suitable time.

- Advance payment: This is the most risky payment method in view of the importer
that the Seller may not send the goods fully subjected to the conditions provided in
the contract about their quantity, quality as well as the time for delivery and others.

2. This is a secure payment method for the exporter with the guarantee of payment
from the issuing bank which is the bank of the buyer provided that the seller must
fully comply with the terms and conditions in the LC. The importer will be take the
responsibility to open the LC and the Seller has the right to examine all the
conditions contained until they are satisfied with it. After dispatching the goods to
the buyer, the seller send the documents as required in the LC to their bank for
examination and delivery to the buyer’s bank.

3. The two parties need to be careful in negotiation all contractual terms and
conditions. Both parties can take avantage of their position compared to other side
in negotiation to define the best secure payment method to ensure their own right
as well as comply with all their obligations for the sake of long term relationship
with their partner.

Review

1. Transferable LC

2. Irrevocable LC

3. Deferred payment LC

4. Red clause LC
5. Advised LC

6. Back to back LC