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Considerations for Trade of Terms of Sales, Documentary Collections and Documentary Credits

In: Managing Economies, Trade and International Business

Author

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  • Antonio Di Meo

    (University of Macerata)

Abstract

Grand strategies, great works of art and historic scientific discoveries are all accomplished by people with complete mastery of the technical aspects of their field. Similarly, a full understanding of the various aspects of commercial transactions is essential for successful business relations. It is important to recognize from the outset that whatever the business transaction, the buyer and seller both seek to ensure that the counterparty is under the first obligation to honour the main contractual provisions, before having to comply with his part of the agreement. Unless there is a compromise solution, one of the parties to an agreement will always bear the risk of breach of contract by the other party. To minimize that risk the reliability, creditworthiness and country of residence of the counterparty, the financial sustainability of the business transaction envisaged and the impact on the firm’s liquid assets, and the payment instruments best suited to safeguard firm profitability and financial stability must be carefully assessed. Careful assessment of the commercial and financial risks of a business deal means close examination of the terms and conditions of the contractual undertaking in question and a clear understanding of its various phases.

Suggested Citation

  • Antonio Di Meo, 2010. "Considerations for Trade of Terms of Sales, Documentary Collections and Documentary Credits," Palgrave Macmillan Books, in: Aidan O’Connor (ed.), Managing Economies, Trade and International Business, chapter 15, pages 288-306, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-27401-3_15
    DOI: 10.1057/9780230274013_15
    as

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