Can You Really Make Money Trading Commodities Online? Un-Legalese-ing The FCO
This full corporate offer being valid for acceptance by the buyer within TEN (10) banking days of the date of this document.
This deal has to be fully agreed upon in two calendar weeks, or ten working days, or it's off.
DELIVERY: First Shipment to begin within TEN (10) banking days after receipt of an Acceptable Letter of Credit 100% Confirmed by a Prime World Bank. Following Shipments as per the Contract and Letter of Credit Terms and Conditions subject to Seller's Prior Approval.
What this clause states is that the first shipment has to get moving within two calendar weeks once the L/C has gone through. The L/C has to be issued by a Prime World Bank and that is definitely the key term that we're discussing in this case. Here are some of the Prime World Banks, although the recent global economic collapse may very well have un Primed some of them:
Bank of America
Bank of China
Groupe Caisse D'Epargne
Industrial & Commercial Bank of China
Mitsubishi Tokyo Financial Group
Sumitomo Mitsui Banking Corporation
Therefore if you can only get an L/C issued by the Butcher Hollow Kentucky Bank ,Gas Er Up & Quilt Handicraft Shop, you can run to the hills... and take your moonshine with you!
PAYMENT: By Documentary Letter of Credit - Transferable, Divisible, Irrevocable, Confirmed and Revolving, unrestricted payable at sight against agreed documents.
Generally this is known as an Irrevocable L/C, but it's important to have all of the terms there. Transferable means that you can transfer the payment to someone else if you want... (why would you want... but I digress...); Divisible means that you can accept partial payments if you so want (again); Irrevocable is very important as that means that there is no way, no how, no excuses in the whole wide world why the terms of the agreement can be met and the L/C not paid out; Confirmed basically means that the Bank has made sure that the money to back up the L/C is there and it's not just some huge international check kiting scheme; and Revolving means that the deal can be executed in ways that call for more or less money to be paid out in varying intervals for extensions of the same deal as long as all the parties agree: This keeps new L/Cs from being issued if the parties want to do another deal or increase the size of this deal, etc.
The L/C will be activated on basis of the Performance Bond from the Seller in Favour of Buyer's Bank.
Again, this just states that the money has to exist before the L/C happens.
All Payment shall be made in accordance with the terms of the Buyer's L/C. The Buyer must issue the L/C directly into the Buyer's Bank and not through mandate or Broker.
Just more legalese to make sure that the Bank knows it's dealing with the right parties and not intermediaries who can flake off and leave someone else holding the bag.
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