![]() GABRICH Global Services Limited does not send a Letter of Intent to anyone. ![]() You can see the mess this document offers – you can get sued for sending a non binding document when you don’t even know if there is a real product that the supposed seller may be holding. There have been instances where the buyer has been sued and damages awarded even though he didn’t know if there was product being offered. Now, what have the courts said in this matter. He does not know if there is a seller or if the seller even wants to sell a product unless he gets a signed offer from the seller. Often sellers hope to, at the same time, get the banking information of the buyer, but why would the buyer offer banking instruments if he doesn’t even know if there is a real product being offered? Only the Signed Offer tells the buyer the intent of the supplier. It is only the offer, signed by the buyer that is binding by International and English standing law. Now let me ask, is a non binding document a security of anything? No. Often a seller will hope to secure the sale with a letter of intent. A letter of Intent is a non binding document issued by the buyer. Letter of Intent – A letter of Intent is supposed to inform a supplier of the intent of the buyer, that the buyer really wants to purchase. Then it is common that payment is made by a standard wire transfer, an MT103. It can and is usually used as a place holder until there is a final determination of the cargo via a Q&Q test and the delivery documents are presented at the seller’s bank for payment. it is strong enough to get a vessel loaded but not usually strong enough to warrant the seller’s bank to issue a performance bond. ![]() A BG is stronger than a bank comfort letter but is still not an actionable banking instrument, meaning it can not be drawn upon by the Seller’s bank. Therefore it is not an actionable banking instrument and is used in the oil business only as a proof of funds.Ī banking instrument sent through the SWIFT system indication that there are a funds that are set aside (blocked) to make a purchase. It is not guarantee of payment and can not be drawn upon by the seller’s bank. You can not board a cargo or oil vessel without this permission.Īlso known as a Bank Capability Letter, or Bank Confirmation Letter, this is a letter from the buyer’s bank, sent through the SWIFT system indicating the buyer’s capability to purchase by confirming that there are funds available to make that financial obligation. It is usually given to a supercargo team and inspector to do a dip test. Used for oil shipments – This is usually a SATCOM message issued by the ship captain, it provides the authority to enable the buyer to board the vessel to confirm cargo availability, quantity and quality. This term may also be a clue to a buyer that they may be able to get a better price if their POD is close to the country of origin. This is a critical price consideration and usually indicates an over-generalization on the seller’s part. A vessel chartered to Cotonou, or Ghana costs a lot less than a vessel chartered to China. If this term is used in a quote the buyer should get clarification. CIF ASWP in a quote implies that CIF shipment would cost the same for delivery to any safe port in the world, whatever the distance from source. Not officially an incoterm, but is commonly used in seller’s quotes as, e.g. This has been written to inform those that are in the oil and petroleum of the proper procedures, contractual documents and banking instruments that will actually work when there is a principal intermediary serving both sides of the deal by occupying a role as a buyer/seller in the middle. There are other terms that are only used in the primary oil market (two principal transactions directly between oil producers and refineries, without using intermediaries). You will find that a number of these terms are depreciated and not used in real oil transactions and the reasons why. Here is a List of terms and acronyms used in Oil Transactions along with explanations of what these terms mean. MHRA 'TtV', All Acronyms, 23 June 2023, Bluebook All Acronyms, TtV (Jun. TtV, All Acronyms, viewed June 23, 2023, MLA All Acronyms. Retrieved June 23, 2023, from Chicago All Acronyms. ![]() Facebook Twitter Linkedin Quote Copy APA All Acronyms. ![]()
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