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99% Business Elites Failed in Trade Credit Crisis, But You Can Avoid
As an international business man, we will inevitably encounter many problems, either large of small. The global trade credit crisis, of course, is one of them.
Let’s look at a real case.
In June 2008, a Chinese company A sold rolled steel to a global company B. They appointed that the latest shipment time is on September 5, 2008. The payment is the l/c, and price terms are CFR.
After signing the contract, company B handed in the l/c in accordance with the contract, company A packed the goods and delivered it to the port.
However, company B required a delay shipment several times on the grounds that the economic is bad before the date of shipment, eventually the two sides agreed to delay the delivery. Then the global economic crisis broke out, the prices of goods dropped sharply, company B said that they would amend the l/c only in the case of goods became cheaper.
The talks lasted until the end of November in 2008, the market prices of goods fell by 60%.
Company A declared to rescind the contract, and lodged a claim against company B after the resale of the goods in accordance with the law. But company B thought the price terms of the contract is CFR, company A shall charter booking shipment as the seller, so the losses which was caused of the undelivered goods shall be borne by company A.
Although company A thought company B constituted anticipatory breach, they could suspend the performance of the contract legally.
What do you think of this kind of situation? And what will you do if you are the buyer or the supplier? Have you ever concerned about the others business credit score?
Now, I want you answer a questionnaire survey—credit investigation in global trade. Through this we can know more usefully what you need in global trade. Click here
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