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Commercial Terms

  • Stephen A. Jones
Chapter

Abstract

The trade and receivables financier relies upon the willingness of the end-buyer to pay the amount invoiced as its primary source of repayment. The purchase order must represent a commitment of the end-buyer to purchase goods on commercial terms that can be fulfilled by the client and its supply chain. Any clause in the commercial contract which allows cancellation or variation of the order, or settlement of a reduced amount will impact upon the reliability of the trade receivable and place credit facility repayment at risk. The key clauses which may impair or restrict the financier’s rights to the goods, the purchase of the debt represented by the sales invoice or which may result in the structured financier receiving insufficient sales proceeds to repay the borrowing are highlighted.

Keywords

Call-off Cancellation Delivery date Entire and divisible contracts Governing law Incoterms® rules Purchase order Sale or return Transfer of title 

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Stephen A. Jones
    • 1
  1. 1.AXS Trade Finance Ltd.Solihull, West MidlandsUK

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