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“ All contracts are agreements but not all agreements are contracts.”



THE SUPPLIER AND END BUYER 

The ‘Supplier’ is defined as the person or entity in possession of export ready goods being sold to FTNX who is defined as the ‘buyer.’ The “End buyer” is defined as the person or entity taking possession of goods ordered from FTNX who is now ‘acting on the other side of the fence’ as the “Seller.” This aspect now serves clarity in defining that FTNX is ‘Buyer and Seller’ of commodities and holds no physical possession of goods it buys and later sells. Whether FTNX is buying or selling goods the following basic trading process applies, as fully expressed on the offer made to FTNX by a supplier, or “Offer To Procure” (OTP) released by FTNX to a supplier when sourcing goods. When FTNX is acting as seller, the end buyer receives a ‘quote’ to commence a potential trade deal. The basis trading process is explained in basic form, which is transcribed further on all offers made by FTNX. In all cases due diligence is conducted before an offer is released to an end buyer or when a supplier serves FTNX an offer. We follows rules and laws and advise on trading aspects as obtained over a 35 year period, which also forms FTNX internal ‘in-house’ trading aspects, rules and policies


QUERY, QUOTE, OFFER, CONTRACT, PAYMENT, P.G, DELIVERY, COLLECTION, DEFECTS, NEXT DELIVERY.

  1. The above routine is defined as the FTNX “orthodox trading process.”
  2. If the orthodox aspect is varied such is called an “advanced trading aspect” by FTNX, as it applies when using in-house terms of reference.



QUERY

FTNX reads all emails advised to us however FTNX receives many enquiries daily, 98% of which are trashed due to poorly applied aspects being conveyed, in where offers presented are incorrectly stated as to matter of rules, laws and procedures. Some ‘scammers’ try to obtain our attention by pretending to be an end buyer or supplier; asking us to look at the document attached to an email, bearing a HTM extension, which are instantly trashed. Scammers are very active in this business. More often than not, ill informed brokers or intermediaries who have not even bothered reading insights offered on our website, present  products to FTNX un-intentionally, which do not exist.They do as much because they do not understand what the process of buying and selling commodities involve, rather than for adverse or criminally inspired reasons. Many ill informed traders are apparent in the market place. Supplier also make offers to FTNX with no price basis being apparent, which means ‘no offer is apparent, if no price basis is supporting it.’ We are unable to follow through on the many enquiries made as time is a luxury we don’t have. The emails we do read are the kind where a brief profile about the supplier is evident in the email text, where a PDF is also apparent, advising what is being offered or sought.


QUOTE

FTNX advises a quote to end buyers at the start of any transaction. It may also accept a quote from a supplier, however FTNX prefers an offer from the supplier to commence a deal on that side of the fence. A quotation once accepted is only confirming what is available, and is not a legally binding aspect.


OFFER

This is a very important document as it pertains to international trade rule, laws and process.”No contract can be effected without an offer, and that no offer is in effect without a price for goods being apparent.” Unless agreed upon otherwise on the offer, the offer is legally binding on parties signing such a document. An end buyer must not accept to sign  an offer unless they intend to complete the purchase as the offer once signed  signifies ‘clear intent’ that parties to the offer intend to proceed to contract. FTNX has time constraints applying when issuing an offer to the end buyer in that; FTNX may commence the  delivery process once the offer is accepted. If the end buyer changes its mind after an offer has been accepted, it could lead to the end buyer paying expenses already incurred in getting the ordered goods ready for delivery.  FTNX offers are elaborate  documents, describing fully the whole basis of the transaction, that must also coincide with entries made on the contract.


CONTRACT

The contract follows normal expected entries based on  standing international rules and laws as well as any expected additions to the contract, as reflected by the entries made on the offer.The contract is advised by FTNX to its end buyer. The supplier serves its contract to FTNX, when selling goods, unless the supplier asks FTNX to issue a contract for the supplier to consider - as requested  on the offer. The contract is  signed to which a PDF copy is advised by email. This event happens whether FTNX is acting as buyer or seller. This act allows  the deal to continue without stalling while awaiting the hardcopy of the contract to arrive by courier mail. The contract return date is very important; any delays here will cause delays to matters of payment and the hardcopy aspect must apply, as the PDF version of the contract alone will not suffice, as the original contract bearing original signatures supports the legal basis intently. Once the supplier signs and returns the contract to FTNX the delivery schedule as  well as lodgement of the financial instrument to pay for goods will quickly  eventuate thereafter; usually, the financial instrument  to pay for ordered goods, must be lodged by FTNX within 7 days of signing the contract with the supplier. In this aspect ,first delivery is usually  applied  30 up to 45 days after the  signed contract is returned as per its validity date. 


PAYMENT 

The financial Instrument FTNX expects from the end buyer and the the financial instrument used try FTNX to pay the supplier are independent trading aspects. The rules governing the issue of a DLC  are specified under ICC UCP600. Whether FTNX uses the financial instrument of the end buyer to pay for goods or not, is irrelevant. What is relevant is the type of instrument used and the method of ‘collection’ applying. The next page  defines  the type of financial instrument FTNX will use or expect. In all cases, payment  is lodged long before first delivery, and such payments are collected once goods are loaded on board ship at port of loading. The term ‘delivery’ refers to the incoterms used which we have  offered insight about on another page.


PERFORMANCE GUARANTEE (P.G)

The supplier receives the payment instrument from the buyer FTNX to which FTNX expects the issuance of a P.G, in the form of a ISBP 2013 SLC. Should delivery/deliveries be late, the buyer collects on the P.G unconditionally. The P.G served to the end buyer by FTNX  has  variable added aspects not associated with the nature of business FTNX has with the supplier. The P.G served to FTNX by the supplier often bears a value representing between 1.0 and 2.5 % of the shipment contract value. A financial instrument to pay for goods MUST be advised first. A P.G SLC MUST never be advised first is an important rule. FTNX understands that delivery is  often late when leading key ports world wide are use to deliver goods. In this light FTNX often allows an extended version in defining  the term ‘late’  to be applied on the supply side, totally different to what FTNX offers its end buyers, strictly  based on ‘circumstances’ in play at the time.


DELIVERY

The delivery modes as defined under ICC Incoterms 2020 applies to all import / exporting transactions  conducted by FTNX. The correct delivery term as per price basis and type for ship used is strictly adhered with by FTNX. As often seen by FTNX, a FCL  delivery mode using the term ‘FOB’ is incorrect; the correct delivery mode for containers is FCA or CIP etc.etc. For NON BREAK CARGO (NBC) that is; cargo  filling the hull of a ship, cannot be broken up, to form separate lots, which are then sold to different end buyers located in different countries. NBC is also specific to mean; the full contents of a fully loaded bulk carrier is heading to a destination port where one end buyer is accepting the goods. NBC further implies to mean one ‘Bill of Lading” being served to one customer. Under ICC Incoterms the term ‘delivery’ means ‘delivery of documents’ and not ‘physical delivery of goods at port of destination.’ Even today many suppliers and end buyer wrongly interpret incoterms.


COLLECTION

When trading in commodities internationally, one party often has not met the other party. To alleviate this concern, banks, rightly so, become involved  in  the matter of ‘payment  instruments’ and collecting on such payment instruments. Bank are in effect are acting as ‘highly informed intermediaries’ to do with one very specific area of expertise– money and payments. Fees are payable to banks for acting on such instruments  and therefore using ‘banks’ serves added peace of mind, as well as serves added matters to do with security, when acting on the financial instrument. Banks cannot get involved in matter of the underlying  contract supporting a deal, as such, banks rely on the presentation of transport documents in a clean state (devoid of mistakes and errors)  as  indicated on the payment instrument. No payment can be collected by the supplier, until such documents are presented correctly in a clean state, to their bank, accordingly FTNX does not get paid either until such documents are presented to the bank of the end buyer. If upon presenting clean transport documents ‘at sight’, the bank of the end buyer  finds all ‘presentation of transport documents’  correctly served, then within 5 banking days of such (another rule), the supplier may collect on the financial instrument, most often, funds are paid out prior to the fully loaded ship leaving port of loading. If issues or ‘descrepancies’ are found, the bank will a seek a waiver from the end buyer or  make demand for  amendments before payment can be collected by the supplier. In matters of collection, ICC URC rules as current will also apply.   


DEFECTS

The supplier is entitled to be paid  when goods have been delivered on board ship in good condition as ordered, port of loading, as such the contract with FTNX regarding defects and remedy may vary greatly  with that served to its end buyer, when compared with the supply side. In essence, evidence of defects are recorded by port officials, insurance/agent of the end buyer or factory personal and photographs are collected to support the defective state of goods being claimed. A formal declaration is also provided. The end buyer serves its demand to FTNX for immediate remedy ‘as specified the contract.’ FTNX then seeks a rebate from its supplier. FTNX allows 90 days from the time goods are delivered to destination port for the end buyer  to make a claim of defective goods.


NEXT DELIVERY

The deal officially concludes 90 days after delivery has occurred at destination port, for a single contracted shipment. As for revolving deals; it is ostensibly impossible to assure 12 delivery in let’s say 12 months  where every delivery is made every month on a particular date. However, the assertion is  made, further  defining  to mean that; since FTNX buy goods in large lots, to receive the lowest buy price in where it then seeks to have such a large single lot delivered monthly, in smaller lots. Two or more shipments arriving in a given month, or where all 12 deliveries were concluded within e.g: 15 months, does not negate matters of contract, as the intent is to ‘deliver 12 shipments’ is the over-riding aspect. Therefore the P.G is payable to the end buyer for each late delivery to assist the end buyer to mitigate the effect of such late deliveries, which will occur, even if the end buyer was buying directly from a supplier. The end buyer will receive all revolving deliveries ordered monthly in ‘good condition’ as ordered, to arrive within a 12 month period or less–or more–which is the ‘normal’ aspect more often than not.


IN SUMMARY

FTNX  cannot take the time to entertain a supplier or end buyer with ongoing frivolous demands and the likes as FTNX applies a strict set of leading security laden procedures to protect its own position, and that of the clients we serve–unconditionally. Any perceived unjustified delays to the pending trade transaction will often cause FTNX to cancel the transaction in an abrupt and unforgiving manner.These transactions are very complex, and absorb a lot of time for FTNX  as we have to bear legal responsibilities on three fronts on some deals which may take up to 3 months or longer to arrive at the final  and successful conclusion. A supplier or end buyer unable to accept the above understanding and other insights served on this website; should refrain from  seeking our services.This is  our ‘polite’ way of saying that FTNX is not interested to serve such entities. Supplier and end buyers with real intent  to conduct business with FTNX will be served professionally, with in-depth care taken on both side of the deal to arrive at a the ultimate conclusion in a safe, legally defined manner.









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