credit-instrument.ppt

1、Chapter ThreeCredit InstrumentsCredit instruments Credit instruments = a written/printed paper against which to pay, includingFinancial instrumentsBill of ExchangePromissory Note,etc.ChequeSecuritiesSharecertificateDebenturesetc.Life PolicyCommercial documentsB/LWarehousereceipts, etc.TreasuryBill/n

2、ote/bondnegotiable assignment Transfer =Semi-negotiableDefinition of negotiable instrumentA negotiable instrument is a chose in action, the fulland legal title to which is transferable by delivery ofthe instrument (possibly with the transferors endorse-ment) with the result that complete ownership o

3、f theinstrument and all the property it represents passesfreely from equities to the transferee, providing thelatter takes the instrument in goods faith and for value.Statutory propertyhand insignatureon the back of instrumentequity holder person transferredwithout hostility pay forFunctions of nego

4、tiable instrumentsSeller draw a draft and ask buyer to pay against it Buyeras a means of paymentBuyer Make a tenor note to Selleras a credit instrumentSeller BuyerSell goods and draw a bill asking to paypayee of bill is sellers creditor Local bank endorse and transfer(sell) the bill to Foreign bankp

5、resent for paymentas negotiable instrumentSample of Bill of ExchangeExchange for GBP 5000.00票据名称Beijing, 5th April, 2003 出票地点 出票日期At 90 days after sight付款时间pay to无条件支付命令Dafeng Corp. or order收款人the sum of Five thousand pounds only金额To: HWT Incorporationaddress xxxxxxx付款人 / 受票人For SXO Compay, Ltd.Li,

6、Shen, manager卖方 /出票人签字 职务Bill of exchange: Definition An unconditional order in writing I order you to pay me for something I have sold youSeller Buyerorderto pay= in black n white addressed by one person, the drawer to another, the drawee drawer draweeBill of Exchange: Definition signed by the pers

7、on giving it(drawer)Li Shen, the manager requiring the person(drawee) to whom it is addressed To: HWT Incorporation to pay on demand or at sightor at a fixed or determinable future time At 60 days (after) sight At 60-day (after) dateOn November, 1st 2003 At 90 days after B/L, etc1. About time of pay

8、ment(1) at sight, on demand, on presentation：sight draft (2) Time bill, term draft, usance billa. Bills payable at xx days / x month(s)e.g. 60 days after sight, etc.b. Bills payable at xx days / x month(s)e.g. 60 days after date, 3 months after date etc.c. Bills payable at xx days / x month(s) after

9、 stated datee.g. 60 days after May 1st, C. Bills payable on a fixed future date Payable on June 30th , payable on May 10th d. Deferred Payment Bill(at xx days/month(s) after the date of shipment /presentation of documents or other specified date)e. Calculation of maturityCounting from the next date after the sight date or issuingdate, 2. About draft amount(1)interest(a) annual interest,(b) counting date, (c) ending date. Uniform Law for draftssigned at Geneva specifies that counting should start from issuing date while commercial practice takes payment date as ending date.