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2．What is the function of status enquiry?

Status enquiry are those written communications in which traders requests information concerning the financial position, credit, reputation, and business methods of other firms.

In business, status enquiry is of the utmost importance to obtain all the information possible respecting the firm one is about to enter into relations with.

3. Can you tell the main difference between a pro forma invoice and an ordinary invoice?

Firstly, in business, a proforma invoice is an invoice sent for form’s sake. Unlike an ordinary invoice, it does not bind either the seller or the buyer.

Secondly, a proforma invoice is not necessarily involved in every transaction. However, as in an ordinary commercial invoice, correct invoicing is a matter of great importance in export trade, the smooth performance of a contract of sale will often depend on it.

4. Give a brief description of a firm offer.

A firm offer is a promise to sell goods at a stated price, usually within a stated period of time. It must be clear, definite, complete and final.

In making a firm offer, mention should be made of the time of shipment and the mode of payment desired; in addition, an exact description of the goods should be given and, if possible, pattern or sample sent.

It is to be noted that unlike a quotation, a firm offer, although not a contractual obligation, cannot be withdrawn by the seller within its validity.

5. When will a seller use a “follow-up” letter?

A follow-up letter will refer to the customer’s inquiry and to the offer the firm has previously made; it will express regret or surprise that no order has been received and discreetly inquire into the reasons.

6. Why should a “first” order be acknowledged by letter?

Because the first order is from a new customer, for the sake of courtesy and in order to let customers realize seller’s respect of them, so that it’s easier to consolidate business relations for future dealings, it is advisable to acknowledged the “first” order by letter.

7. What is the advantage of payment by L/C?

Letter of credit is a reliable and safe method of paying, facilitating trade with unknown buyers and giving protection to both sellers and buyers.

For seller, L/C gives greater assurance of payment, the issuing bank irrevocably commits itself to honor the buyer’s draft and/or documents provided that the stipulated documents are presented and all the stipulation of the credit are complied with.

For buyer, first, the advantage is that he didn't pay until goods shipping out, obtaining the safeguard of receiving the goods on time, quality, and quantity. Then, buyer can also require banks to give credit according to the L/C. So that buyer can reduce the cost of business, and buyer with very few money can do bigger business.

8. In a letter to urge the buyer to expedite the L/C, is it suitable for the seller to blame the buyer for non-performance of contract? Why?

No, except in special circumstances, to start off too strongly by blaming the buyer for non-performance of contract.

Because message urging establishment of letter of credit must be written with tact. Their aim is to persuade the buyer to co-operate more closely and in fact to fulfill his obligations; otherwise, they will give offence to the buyer and bring about unhappy consequences.

The first message sent should therefore be a polite note saying that the goods ordered are ready