Documents Involved in International Trade — Flashcards

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An indent is an order placed by the national of one country to the national of another country for purchasing goods, usually through a middleman or export agent. It is different from an order placed d…

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An order is placed directly to the exporter. An indent is placed to the middleman, usually an export agent. Both are used in foreign trade, but the route of placement is different.

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The types of indent are Open Indent, Closed Indent, and Confirmatory Indent. Open Indent leaves some matters to the exporter’s discretion, Closed Indent gives no discretion, and Confirmatory Indent be…

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In an open indent, the importer leaves some decision-making to the exporter regarding quality, quantity, price, or other details. In a closed indent, the exporter must follow the exact details given a…

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A confirmatory indent is an indent that becomes final only after confirmation by the importer or the importer’s agent. It is not fully settled until that confirmation is given.

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A letter of credit is a document issued by the importer's bank in favour of the exporter, guaranteeing payment of a definite sum if the importer dishonours the bill. It helps establish the importer’s …

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It gives assurance to the exporter that payment will be made even if the importer fails to honour the bill. It also establishes the creditworthiness of the importer and helps avoid bad debts.

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The types are Clean or Open Letter of Credit, Documentary Letter of Credit, Revocable Letter of Credit, Irrevocable Letter of Credit, and Revolving Letter of Credit.