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Business contract

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cloverleaf

Business contract

Postby cloverleaf » Fri, 19 Aug 2005 11:37 am

I am going to set up a small business..my supplier is fr Thailand. They r not a listed company based. Just a few workers working for them. In this case, how do i ensure that there won't be a breach of contract? I mean there is no legal agreement to sign..issit juz based on mutual trust? What if i pay them and they breach the agreement? Should I at least write up a agreement and both parties sign? Pls advise me!!!!!!!!! million thanks..

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Postby Strong Eagle » Sat, 20 Aug 2005 10:41 am

A written agreement is not worth much if you have no way to enforce it. This is particularly true when dealing with a business in another country.

You need to minimize risk. Don't make payment until you get the goods. Or agree to a down payment with the remainder payable upon receipt of the goods.

This is a common problem in import/export. You may want to consider a third party. For example, your bank can issue a letter of credit, a guarantee of payment if delivery condtions are met. This way, your supplier knows he won't get screwed and you know you won't get screwed because the letter of credit will be executed only if the terms are met.

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Postby Guest » Thu, 25 Aug 2005 11:05 pm

Strong Eagle wrote:A written agreement is not worth much if you have no way to enforce it. This is particularly true when dealing with a business in another country.

You need to minimize risk. Don't make payment until you get the goods. Or agree to a down payment with the remainder payable upon receipt of the goods.

This is a common problem in import/export. You may want to consider a third party. For example, your bank can issue a letter of credit, a guarantee of payment if delivery condtions are met. This way, your supplier knows he won't get screwed and you know you won't get screwed because the letter of credit will be executed only if the terms are met.


Strong Eagle,

I'm worry with this problem too.

My company is just a small (startup) company, is it possible to issue a letter of credit? what are the requirements from the bank?

What are the usual terms need to be met in export/import?

Let's say there's a customer want to order goods from me, and I call the supplier to send me goods. If the supplier never send me the goods, what will happen? Well, I still can get back my money, don't I? But will I get sued by my customer ? :-|

TIA

-david-

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Postby JayV » Fri, 26 Aug 2005 9:21 am

When you open L/C your bank will first check if you have enough funds in your account to fully cover the amount of L/C. If there are not enough funds and you do not have a credit line with the bank they will ask for a collateral.

If you open L/C but your supplier fails to ship the goods it means that they have not met the L/C conditions and do not get paid either.

Securing payments in import/export business is one thing. Another, equally important is to make sure that you get the quality you want. What is the warranty/replacement policy of your supplier and how effective is it? How well do you know your supplier and their production?

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Letter of Credits

Postby jmoney » Sun, 28 Aug 2005 10:43 am

Are useful but also can be very nit-picky. You should contact your bank of origin for advice.

My company has used several of them and sometimes we get dinged by very strict requirements supported by our customers.

You shoudl draw up your own terms and include penalities if there are discrepencies in the transactions... best wsay to do it.

check with your local branch of your bank to get them to help you draw up favorable terms.

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Re: Business contract

Postby Oriental » Thu, 01 Sep 2005 4:33 am

cloverleaf wrote:I am going to set up a small business..my supplier is fr Thailand. They r not a listed company based. Just a few workers working for them. In this case, how do i ensure that there won't be a breach of contract? I mean there is no legal agreement to sign..issit juz based on mutual trust? What if i pay them and they breach the agreement? Should I at least write up a agreement and both parties sign? Pls advise me!!!!!!!!! million thanks..

How to approach this challenge depends on the volume and value of your imports from Thailand.

If the value of your potential order is not of any significant value and thereby does not impose a huge strain on your finances in case of failure, then I would say that a prepayment is the way to go. Just make sure that your supplier understands that the potential profit from a long term business relationship by far exceed any short term profits he may get from keeping your money and not delivering the goods.

On the other hand if your order represents a substantial value you may consider making a small deposit in order to have the goods produced and then fly to Thailand in person to make the final payment after inspecting the goods and receiving the B/L. Airfares are quite cheap nowadays and it should not take more than a days time to finalize your business in Thailand.

As a last remark it is always a good idea to put in writhing what you have agreed upon, i.e. volume, quality, delivery, payment etc. It will reduce the risk of misunderstandings.
Impossible is nothing!

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Postby CSP » Thu, 20 Oct 2005 1:28 pm

If i had paid the supplier for the goods in their area, and is goin to ship over to singapore, Do i need to know the procedures and do all whatever documents needed so to export and import? will i need to book shipping space, how and where to collect the good once it reach the destination etc.....

Me just started to read books on export / import, but don ready understand the book.
Maybe the book is not for newbie to understand :cry:

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Postby Oriental » Thu, 20 Oct 2005 3:35 pm

CSP wrote:If i had paid the supplier for the goods in their area, and is goin to ship over to singapore, Do i need to know the procedures and do all whatever documents needed so to export and import? will i need to book shipping space, how and where to collect the good once it reach the destination etc.....

Me just started to read books on export / import, but don ready understand the book.
Maybe the book is not for newbie to understand :cry:


Perhaps you should gain some work experience in import/export business first before starting a business on your own. If you spend, say one year, in an import/export company you may gain vital information and know how that will come in handy and reduce the risk of making fatal mistakes.

However, if you wish to proceed right away then it is possible to buy the services you require, just contact a shipping agent.

If your price, profit margin and traded volume allows for it, then money will buy you just about any service or assistance you will need in running your business.
Impossible is nothing!

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Postby CSP » Thu, 20 Oct 2005 4:56 pm

Am i able to be in an import/Export com with NTC 2 cert.
What post will i hold in this ntc 2 cert.

I jus saw (tue clsassified) a course on import & export procedures & documentatio for $325.50, $288 with SDF subsidy. 15hrs(5 sessions)

Thought of signin up but don know is it useful to get a job in I/E port or not.

Any suggustion or someone u know need to employ worker in import/export industries. Any post also can.

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Postby CSP » Thu, 20 Oct 2005 5:38 pm

Work for free also can.
But must provide transportation, 3 meal allowance
And
TEACH ME NEW THING EVERYDAY.
(must be related to import/ export, others not considered)

No scolding, must be patience to teach. Haha.
Teach untill i know.
Must be able to answer my question......

:lol: :lol: :lol:

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supplier

Postby David Arie » Wed, 27 Dec 2006 2:09 am

Please use;
CLASSIFIEDS
its FREE.


Plavt.

Moderator.
I am Indonesian Male, 35 years old. Looking for any kind of work in Singapore. Please contact me if you have any opening. Thank you.

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Postby CSP » Wed, 27 Dec 2006 11:38 pm

Cannot be lah.

Was told that nothing is free in this world.
no free lunch.

Every thing cost a cent or part of a cent without you realising it.

So when you are reading this, think, how much hav you spent just to read what i wrote.

Clue
1. Where are you now, the place where you are cost any money?
2. are you sitting on your chair? where or who had bought it, how long ago was it replace.
3. LOOK at what you are looking now, how much they cost you to own it?(computer)
4. check you bill and see how much you need to pay electricity.
5. HOW much are you worth in this minute when you read this.
678910 and many many more.

You can read this because you are alive now,
How MUCH does it cost to keep you alive now....you food, drink, etc.

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Postby CSP » Wed, 27 Dec 2006 11:41 pm

By the way thanks for replying this, one year old topic,

:D :D :D :D

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Postby AdamC » Fri, 12 Jan 2007 8:17 am

wow... there's a risk dude. Maybe in this case its better for You to understand the market & law of Thai's well (& their practise, of cos). contract recognise here might not apply to there. Its all about risk-taking. Check on the company first.

btw, if You do not have big bulk of goods, just leave the job to forwarders. something like DHL, they have business consultant to meet your need.

The nxt important issue is, Quality assurance =) make a contract or mutual understanding on how to handle faulty equipments :D

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Postby MoTokyo » Fri, 12 Jan 2007 3:48 pm

I assume the individuals you will be doing business with in Thailand are not very close friends and if my assumption is correct then you have no legal protection for any transactions that may take place. Why? Because given enough cash they could easily disappear and not think twice about your situation. Local authorities will not be of any assistance if your business isn't located in Thailand, if it isn't a wealthy business and most importantly, if you are not Thai. Can you even speak Thai?

Ask yourself more essential, fundamental questions about the transactions taking place and protection of assets during transit.

If the ship sinks whilst transporting your items, do you pay the supplier?

If the supplier claims to have shipped the items yet they never arrived, do you pay the supplier?

If the items arrive damaged or in poor condition, is it the suppliers fault, the transporters fault or your fault? Do you pay the supplier?

If the items are different than what you have asked to receive, do you send them back to Thailand or refuse to pay the supplier? Sending the items back could easily dig into your bottom line if the transaction is large enough.

So on and so forth... I think these questions are more important than whether the individual in Thailand might pull a fast one on you and take any money received before sending items in good condition. Because if he wants to screw you, he will.

Don't forget that Thailand has seen a rash of assassinations in recent times (especially Bangkok) and hired guns are fairly cheap being only around 10kUSD for sloppy daytime hits (motorcycle).

My advice: Fly to Thailand personally, purchase the items directly, arrange shipping with reputable transporters and be on the ground here in Singapore to process the paperwork with customs.

Untill you can afford to establish a reputable supply chain, you'll have to do all the legwork yourself. That's how distributors get started.

Good luck.


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