Lecture 5 offers and counteroffers Objectives: 1.learn about features of offers and counteroffers 2.learn how to write offers and counteroffers 3.learn how to decline a counteroffer

The content in the lecture 1. offers 2. counteroffers 3. proforma invoice 4.response to offers

Ⅰ offers Definition the types of offers important notes on an offer the ways to indicate the validity of an offer the procedures of a firm offer Withdrawal and revocation of an offer

definition an offer refers to a promise to supply goods on the terms and conditions stated, in which the seller not only quotes the terms of price but also indicates all necessary terms of sales for the buyer’s consideration and acceptance.

the types of offers firm offers non-firm offers

firm offers In a firm offer, the exporter often promises to supply certain quantity of goods at a fixed price within a stated period of time. Other terms such as quantity, specifications, packing, and payment must be sufficiently clear and definite as well. Once a firm offer is accepted it cannot be withdrawn. A firm offer is binding in law. It is with the engagement. It should contain some qualifying words like” for acceptance within seven days” or “this quotation is good for two weeks.”

non-firm offers A non-firm offer is an offer without engagement. If the exporter wants to establish business relations with a new customer or explore a potential marker, he may send a non-firm offer in the form of a letter, a pricelist, a pro forma invoice, a catalogue, or a quotation sheet. It contains a reservation clause like” we offer without engagement ”, “ the offer is subject to our final confirmation ”,etc, which makes it possible for the offer to be revised or withdrawn at any time.

important notes on an offer it is addressed to one or more specific persons the proposal must be definite, clear and specific in quantity, price and General Business Terms. an offer must indicate the intention of the offerer to be bound in case of acceptance. An offer must reach the offeree

the ways to indicate the validity of an offer Specifying the deadline by which the offer must be accepted. Eg. The offer is subject to your reply by 18, October. Specifying a period of time for acceptance. Eg. The offer is valid for three days. Indicating the non-specific time. Eg. we look forward to your early reply.

the procedures of a firm offer In the opening paragraph, express thanks for the inquiry, if there is any. In the second part of the letter, state clearly the name of the goods, quality, quantity, and specifications, details of prices, discounts, terms of payment, packing and date of delivery. Also, remember to include the validity of the offer. In the last part, make favorable comments on the goods, and express your hopes for an order.

Withdrawal and revocation of an offer The terms of an offer can be revoked The terms of an offer cannot be revoked

An offer can be revoked if: An offer may be withdrawn or revoked before it is accepted. An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer. Until a contract is concluded, an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.

An offer cannot be revoked if: 1) It indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable 2) It was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted on the offer.

Ⅱ counteroffers Definition: the function:

Definition: it refers to a reply to an offer which purports to be an acceptance but contains additions, limitations or other modification constitutes a counter-offer.

the function: It is not only a rejection to the original offer, but also a new offer. The buyer can no longer accept the original offer when he has made a counter-offer, unless the seller agrees, likewise, a counter-offer terminates as soon as it is rejected by a counter counter-offer.

Ⅲ proforma invoice The definition: the function: the content: the sample:

The definition: it refers to a form of quotation to the potential customers. It is without engagement.

the function: as a quotation in figure as sales confirmation with the proforma invoice, the buyers can obtain the Import License and the permission of foreign exchange, and open the L/C.

the content: commodity quantity price , packing shipment payment the detail information in the bank

the sample:

Ⅳ response to offers declining an offer entire acceptance conditional acceptance: counter-offer

declining an offer situation: guidelines for declining an offer:

situation: if a buyer feels that the gap between the offer and his expectation is too wide to be bridged, he may choose to decline the offer and end the negotiation.

guidelines for declining an offer: the neutral opening: use neutral indirect expressions such as “thank you for the offer of …”, “we appreciate your trouble in making us an offer…”. Avoid negative openings such as “we regret to inform you that…”, “unfortunately we cannot accept your offer,” because they put the reader on the defensive and will affect their reactions to the rest of the letter. The main body: the body presents the negative message. The closing: it should be courteous, helpful and sincere. Leave the door open for future business. Using positive words and phrases, avoid apologetic expressions or repeating the unpleasant news.

entire acceptance ⅰ The situation: ⅱ Notes on acceptance: ⅲ Guidelines for writing acceptance letters ⅳ Sample

ⅰ.The situation: an entire acceptance is an unreserved by the offeree, who is willing to enter into a contract with the offerer according to the terms and conditions agreed upon.

ⅱ.Notes on acceptance: an effective acceptance should satisfy the following essential conditions: late acceptance: It has two layers of meaning withdrawal of an acceptance

1. an effective acceptance should satisfy the following essential conditions: An acceptance can only be made by the offeree The offeree must agree to the precise terms and conditions offered, for a contract to be concluded. The offeree must state his acceptance clearly. The acceptance must reach the offerer within the validity of the offer.

2. late acceptance: It has two layers of meaning an acceptance is late: it refers to the acceptance reaching the offer beyond the validity. It is not effective as an acceptance, but is considered as a new offer. a late acceptance: it remains effective if without delay the offerer orally so informs the offeree or dispatches a written notice to that effect.

3.withdrawal of an acceptance once an offer is accepted it cannot be withdrawn. But an acceptance may be withdrawn if the withdrawal reaches the offerer before or at the same time as the acceptance would have become effective.

ⅲ Guidelines for writing acceptance letters the points in the acceptance letters the principles in the letters: direct and approachable

1.the points in the acceptance letters Express your appreciation for the offer in the beginning State your acceptance Make it clear what you are accepting. Urge the addressee to act as required by the agreement. You may ask the reader to start manufacturing at once (if you are the buyer); or you may remind him to open the letter of credit without delay (if you are the supplier). End the letter by showing your confidence in the smooth execution of transaction.

2. the principles in the letters: direct approachable

Re: Leather Bags for Men ⅳ Sample Dear Mr. Jones, Re: Leather Bags for Men We accept your counter-offer of March 8 and are pleased to confirm having concluded the transaction of the captioned goods with you. Our factory has informed us that they can, at present, entertain orders of 3000 per week. Thus you may rest assured that your order of 5000 for shipment next month will be fulfilled as contracted. However, we’d like to emphasize that your L/C must reach here by the end of this month. Otherwise, shipment has to be delayed. We enclose with this letter out sales confirmation NO.03M15 in duplicate. Please countersign and return us one copy for records. We appreciate your cooperation and trust that our products will turn out to your satisfaction. Sincerely yours, (Signature) Sales manager

Conditional acceptance: Counter-offer Concession on price

My heart 1. I am confused, why? 2. what do I really want and get, can you tell me? 3. my future, I love you so much, why do you hurt me again and again?

Just do it 以大海的胸襟,小草的精神,勇往直前,享受我们经历过的,现在经历的和即将经历的,我们将不枉此生! GOD BLESS US! FIGHTING!