Commercial Correspondence Unit 4 Offers and Cover Letters of Offers

What is an offer?
An offer is a promise to supply goods or services on the terms stated. Usually the offerer is the seller, and the offeree is the buyer.

Types of offers
Firm offer Also called Quotation with qualifying

statements

Free offer (offer without engagement) Also called Quotation

Firm offer

With qualifying statements, usually about time validity

For acceptance within 14 days. The prices quoted will apply only to orders received on or before 31 March.

Usually made to one buyer only Without sales confirmation Not legally binding until accepted
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Free offer (offer without engagement)

Without qualifying statements, providing negotiable terms by using adverbs normally or usually, or by asking the customer to confirm. May be made to several buyers. Not legally binding even when accepted by the buyer. Only binding when the seller, after receipt of the buyers acceptance, confirms that acceptance

Free offer (offer without engagement)

Normally we allow a 23% trade discount off net prices with payment on a documents against payment basis. Please let us know if this arrangement is satisfactory.

Parts of an offer
Opening Express thanks for the enquiry and/or pleasure in offering 2. Main message Mention at least 7 terms and conditions 3. Closing Express hope for orders and future business
1.
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Opening
Free offer:

We thank you very much for your enquiry of (asking) for and are happy/ glad/ pleased to make you an offer on the following terms and conditions. We and take pleasure in making you an offer for the said goods.

Opening
Firm offer:

We thank you for and are happy to offer firm until 25 March 20__ on the terms and conditions as follows. We are pleased to make you a firm offer, subject to acceptance within 21 days, for 10 machines We thank you to make you an offer which is valid until October 20__ on the following terms and conditions.

Opening
Firm offer: Useful expressions

We are pleased to make you an offer which is valid until We are pleased to offer firm until This offer is firm for 20 days This offer remains open for acceptance within 15 days This offer is subject to acceptance within
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Main message
Mention at least 7 terms and conditions: 1. Name of the goods 2. Quality and specification 3. Quantity 4. Details of prices 5. Packing and marking 6. Delivery 7. Terms of payment
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Main message
More terms and conditions with machines : 8. Technical documents 9. Warranty or guarantee Others: Discounts Offering items not asked for

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Main message
1.

Name of the goods/commodity

woolen sweaters, style L-29 Style L-29 woolen sweaters L-29 woolen sweaters/ woolen sweaters L-29 washing machines, model TD236 Model TD236 washing machines TD236 washing machines washing machines TD236

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Main message
2. 3.

Quality and specification

Quality and specification: as per samples Quality: as per enclosed technical description Specification: as per enclosed catalogue No. 23/TL
Quantity

1,000 pieces/ units/ items/ sets 600 tons/ metric tons/ MT tons
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Main message
4.

Prices

Price: 110.00 per unit CIF Hai Phong including packing

5 elements: 1) Currency: / $/ GBP/ USD/ VND 2) Amount: 110.00 3) Unit price: per unit/ per 1,000 units/ per ton 4) Terms of price: CIF Hai Phong 5) Including/excluding packing
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Main message
4.

Prices INCOTERMS: 4 groups Group C (CFR, CIF, CPT, and CIP) Group D (DAF, DES, DEQ, DDP, and DDU) Group E (EXW) Group F (FCA, FAS, and FOB) Others: Carriage Paid (C/P): charges paid by the sender Carriage Forward (C/F): charges paid by the receiver
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Main message
4. Prices

INCOTERMS

all delivery costs to Hong Kong cost, insurance and freight) USD35,000.00 FOB Rotterdam (the price includes delivery costs to when the goods are on board ship at Rotterdam)

30,000.00 CIF Hong Kong (the price includes

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Main message
5.

Packing and marking

Packing: in export customary packing Packing: in seaworthy cartons marked/numbered 1-6 Packing: in seaworthy wooden cases for long voyage Marking: upon the buyers instructions
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Main message
6. Delivery

Delivery: in one lot/ shipment in December 08, 20__ for immediate shipment The machines can be dispatched within 6 months from receipt of your formal order. Shipment: within 3-4 weeks of receiving order
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Main message
7. Terms

of payment

Bank draft/ bankers draft Bank transfer (mail, telegraphic) Bill of exchange (sight draft or term draft) Sight draft: a bill of exchange payable immediately upon acceptance (accept to pay) 60 days (after) sight: payable within 60 days of acceptance (60 D/S)
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Main message
7. Terms

of payment

Cheque Letter of credit (L/C)

at sight or at days sight

Revocable L/C: that can be cancelled Irrevocable L/C: that cannot be cancelled Cash on delivery (COD)

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Main message
7.

Methods of payment

Payment: (to be made/effected) in US dollars (pounds sterling) by an irrevocable letter of credit (at sight/at 60 days sight) to be opened with (via/through/at) Lloyds Bank, London, 15 days before (prior to) the shipment, valid for 45 days, to the account of Vietcombank, in our favour (in favour of the seller) for the total value of the goods to be shipped.
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Main message
8.

Technical documents

Two copies of users manual to be supplied with each unit of goods. 12 months from use or 18 months from despatch/dispatch.

9.

Warranty/Guarantee

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Closing
Expressing hope for orders and future business

We look forward to your early order. Thank you for your interest. We look forward to hearing from you soon. We hope very much that we can reach agreement on the terms quoted. We look forward to the opportunity of doing business with you.
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Practice 1

1. Thank you for your enquiry of 1 December for (asking for) Lao Cai apatite. (Hoang Thach cement, kitchen utensils, rattan chairs, and woolen carpets of various types/ designs) 2. In reply (response) to your enquiry of October 20 asking for tinned/canned peanuts, pineapples, cucumbers, we are happy to offer you these three items on favorable conditions. 3. We are pleased to receive your enquiry of 14 November for anise and pine oil. As requested, we have already sent you the samples by (parcel) post.

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Practice 1

4. We thank you for your enquiry of 8 October for our vaseline and are pleased to make you a firm offer, (which is) subject to acceptance within 10 days, for 1,000 tons of vaseline at the price of USD815.00 per ton, CIF London. 5. We are interested in the purchase of 10 Model X30 pumps, and 10 Model K25 pumps. We wonder if you could/ can offer us a 5 % discount (a discount of 5%) on such an amount. 6. We regret our inability (that we are unable) to give you a discount on such a small quantity. If you are willing to place an order for 30 pumps, we will (are pleased to) give you a 2.5% quantity discount.
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Practice 1

7. The delivery is to be made as soon as possible and not later than 1 December. (We would like you to deliver the goods asap and not later than 1 December.) 8. We will try our best to deliver the goods in mid November or by the end of that month at the latest. 9. Regarding (With regard to) terms of payments, we suggest (stress) that it should be made by an irrevocable letter of credit.

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Practice 1

10.Payment: by an irrevocable letter of credit to be opened at (through/with)Tokyo Commercial Bank, 15 days before the shipment at the latest, valid for 30 days, to the account of Vietcombank in our favor for the total value of the goods to be shipped. 11.We would highly appreciate it if you could deliver half of the ordered goods immediately, the rest will be shipped in two weeks time.

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Practice 2

Dear Mr X Re: Rush Mats

We thank you for your enquiry of 25 June 20__ and are happy (glad) to learn that you are particularly interested in (the purchase of) our rush mats. We are pleased to make you an offer, subject to our final confirmation (acceptance) upon receipt of your order, on the following terms and conditions:

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Practice 2

1. Commodity: fancy rush mats (patterned rush mats) 2. Quantity: 5,000 pieces 3. Specification: as per enclosed specification 4. Price: 1.00/piece, CIF London, including packing 5. Packing: 20 pieces to be packed in one bale, which is wrapped in strong rush-mating and steel hooped. 6. Delivery: in one lot in August 20__ 7. Payment: in pounds sterling by an irrevocable letter of credit to be opened at (through/with) the Commercial Bank of London to the account of Vietcombank in our favour, 15 days before (prior to) the shipment.
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Practice 2

We look forward to your prompt order and guarantee that (assure you that) any of your orders will be given our best attention. Yours sincerely

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Practice 3
The Vietnam national Sundries Import and Export Corporation

36 Ba Trieu Street, Hanoi, Vietnam Tel: Fax: Email:

Your ref: 17 August 20__ Our ref: NT/123

24 August 20__ Mr John Smith M.D. Edward and Co., Ltd Finewell House 8 Finsbury Square London EC2 England

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Practice 3

Dear Mr Smith We thank you for your inquiry of 17 August 20__ (asking) for our table tennis bats, model VS 44TD, and badminton bats, model VB 50MT. We would like to offer firm until 3 September our badminton bats on the following terms and conditions: 1. Commodity: VB 50MT badminton bats 2. Specification: as per enclosed catalogue No. 22/95VS 3. Quantity: 500 pairs
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Practice 3

4. Price: USD2.00 per piece FOB Haiphong port including packing 5. Packing: in export customary packing 6. Marking: upon buyers instructions 7. Delivery: in one lot in October 20 8. Payment: in US dollars by an irrevocable letter of credit to be opened with ABC Bank, London, 15 days prior to the shipment, valid for 45 days, to the account of DEF Bank, in our favour for the total value of the goods to be shipped.
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Practice 3

We regret that the VS 44TD table tennis bats are out of stock. However, we would offer you Model VS 45MH of the same quality on similar conditions with Model VS 44TD and at the price of USD8.00 each. We hope you will find our terms and conditions satisfactory. We are looking forward to your order soon. Yours sincerely
Nguyen Thanh Export Manager
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