THE UNIVERSITY OF DANANG UNIVERSITY OF ECONOMICS The faculty of International Business TOPIC RESEARCH ON INQUIRY, OFFER, COUNTER OFFER, ACCEPTANCE, AND HOW TO WRITE INQUIRY, OFFER, COUNTER OFFER,[.]
THE UNIVERSITY OF DANANG UNIVERSITY OF ECONOMICS The faculty of International Business ……….……… TOPIC: RESEARCH ON INQUIRY, OFFER, COUNTER OFFER, ACCEPTANCE, AND HOW TO WRITE INQUIRY, OFFER, COUNTER OFFER, ACCEPTANCE LETTER Lecturer: Nguyen Thi Phuong Thao Class: 46K01.2 Group Members: Student Number: Nguyen Phuong Lan 201121601218 Nguyen Doan Khanh Linh 201121601219 Hoang Le Anh Thu 201121601235 Huynh Anh Thu 201121601236 Vo Thi Hong Thuy 201121601237 Da Nang, 2022 Contents I Explain inquiry, offer, counter offer, and acceptance Inquiry .3 Offer a Definition .3 b Legal validity c Classification Counter offer a Definition .5 b Feature Acceptance a Definition .6 b The effect of acceptance of an offer is provided in Article 18.2 of the CISG 1980 c Withdraw an acceptance provided for in Article 22 of the CISG 1980 II Inquiry, Offer, Counter-offer, and Acceptance Letters Inquiry Letters a Requirements of Inquiry Letters .7 b Contents should be included in an Inquiry Letter c Format of Inquiry Letters .7 d Sample of Inquiry Letters .10 Offer Letters 10 a Regarding firm offers 10 b Regarding free offers 10 Counter offer Letters 12 a Form of a buyer's counter offer letter 12 b Form of a seller's counter offer letter 12 Acceptance Letters 13 III General example for Inquiry, Offer, Counter Offer, and Acceptance 14 Inquiry Letter 15 Offer Letter 16 Counter offer - Buyer's Counter Offer Letters 17 Counter offer - Seller's Counter Offer Letters .18 Acceptance .19 IV References .20 I Explain inquiry, offer, counter offer, and acceptance Inquiry - Inquiry is a transaction offer or, in other words, an offer to establish a sales relationship from the buyer - On the commercial side: This is when the buyer asks the seller to inform him or her about the price and terms of purchase - On the legal side: The law does not bind obligation to the inquirer, which means that the inquirer is not obligated to buy the goods If the inquirer does not purchase the goods, they cannot be sued or complained - Forms of inquiry: An inquiry can be made verbally, in writing, or in other specific behavior - The content of the inquiry is not limited, depending on the inquirer Asking prices does not bind the responsibility of the price inquirer, so it is often used to probe the market Offer a Definition - The concept of an offer is defined in Article 14 of the CISG 1980 specifically as follows: A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price Thus, the offer will be determined when it is sent to one or more identified people, expressing a clear will to conclude a contract for the sale of goods A clear expression of will here be determined by whether the offer states the goods and the quantity, price, and basic terms of a contract of sale Once accepted by the offeree, the offeror shall be bound by the offer unless the offer expires or the offeror cancels it before the offeree accepts the offer - The concept of an offer according to the provisions of Vietnamese law: Offering was first used in the Commercial Law 1997 and continues to be regulated in the 2005 Commercial Law Accordingly, the offer must contain the main contents of the goods sale and purchase contracts such as the name of the goods, quantity, quality control specifications, price, payment method, delivery time and place, and delivery method Offering includes an offer to sell and an offer to buy Offers can be made verbally, in writing, or in other specific behavior b Legal validity The legal validity of an offer is provided in Article 15 of the 1980 CISG Legally, the offeror will be bound to his obligations by the promises made in the offer to others The validity period of the offer is fixed by the offeror; if not specified, this period is 30 days from the date the offer is sent However, the offer will not be legally binding on the offeror in the following cases: The offer does not reach the offeree Due to some reason such as a wrong address or delay in the delivery of information that makes the offer not reach the place of the offeree, the offer will not be legally binding on the offeror The offeror receives notice of refusal from the offeree in accordance with Article 17 of CISG 1980: “An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror” The notice of withdrawal of the offer is delivered to the offeree before or at the same time as the invitation to offer as provided in Article 15.2 of the CISG: “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.” This provision applies to irrevocable offers According to the provisions of the Vienna Convention, only in the event that the notice of withdrawal reaches the offeree before or at the same time as the offer, the offeror will not be bound by the terms committed in the offer Therefore, if the offeror wishes to escape his obligations under the offer, the offeror must give notice of withdrawal by means of communication faster than that which he has used to send a previous offer, so that the notice of withdrawal can reach the offeree before or at the same time as the offer Notifying the offeror of the cancellation of the offer to the offeree before he or she sends his acceptance of the offer is specified in Article 16.1: "Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.” This is the rule that applies to the type of offer that can be canceled This will only happen if the offeror's notice of cancellation is delivered to the offeree before he or she sends his acceptance of the offer to the offeror Legally, in the event that although the offeree has received the offer but has not expressed his or her opinion, the contract is considered to have not been formed Thus, with respect to a refundable offer, if prior to submission of the acceptance of the offer to establish a contract, the offeree receives notice of the offeror's cancellation of the offer, then this offer will no longer be valid binding value of the offeror's obligations c Classification - Classify offers based on the proactive level of the offeror: Passive offer: is the seller's offer if the buyer's request (inquiry letter) has been received before (Passive offers are also known as responses to inquiries) Active offer: is the seller's initiative to offer before the buyer's inquiry letter has not been received - Classify offers according to the obligation of the offeror: Firm Offer: is an offer to sell a certain lot, specifying the time for which the offeror is bound to be responsible for his offer This time is also known as the validity period of the fixed offer During the validity period, if the buyer fully accepts the offer, the contract is considered concluded Free Offer: is an offer that does not bind its originator, and at the same time with a shipment, one can offer freely to many customers In a free offer, it is necessary to specify “Offer without Engagement” A free offer becomes a contract upon reconfirmation by the exporter The buyer cannot blame the seller if, after accepting the offer, the seller does not sign a contract with him Counter offer a Definition - A counter offer that responds to the original offer When an individual requests a counter offer, it means that the initial offer has been rejected and suggested by another offer The refund responder offers three options for the original offerer: accept the respondent's counter offer, reject it, or make another offer - According to the provisions of Article 19.1 of the CISG 1980: “A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counteroffer” b Feature - - One side makes an offer first when two parties are negotiating a transaction or a business deal A counter offer is a reaction to the initial offer that may alter the deal's conditions and price Depending on which side is requesting the counter offer, the suggested price may be greater or lower than the original price If a person refuses or rejects the original offer, he or she can renegotiate by the counter The parties are allowed to make a counter offer several times during the negotiation process until an agreement is reached In back-and-forth negotiation, each party will make a counter offer at a price more favorable to them than the previous offer Neither party is obligated to accept the other's offer until they have agreed to a contract, which happens when a counter offer is accepted It is also time to form a binding and enforceable contract against either party The counter offer will invalidate the previous offer and the original offer is no longer liable for it - A counter offer may include explanations of the terms of a previous offer or request additional information to clarify the previous offer A negotiation is complete when both the buyer and the seller agree and accept the final terms without any additional conditions or modifications - When a party makes a counter offer, that party usually sets the condition When a seller receives a low-priced counter offer, he or she can counter that by offering a price he feels is reasonable The buyer can accept the offer or renegotiate it The seller can then also oppose the buyer's offer until an agreement is reached The person receiving the counter offer does not necessarily accept it, but negotiates to the contrary Acceptance a Definition - Acceptance of an offer is an expression of the offeree's will to agree with the offeror's offer - According to the provisions of Article 18.1 of the CISG 1980: “A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance Silence or inactivity does not in itself amount to acceptance” - Legally, an acceptance can only give rise to a contractual relationship when the offeror is aware of the offeree's acceptance According to the provisions of the CISG 1980, the offeree's acceptance of an offer is valid only when it is expressed by a statement or by conduct, indicating his agreement to the content of the offer content of the offer Thus, according to the provisions of the Convention, the silence or inaction of the offeree will not automatically be construed as acceptance b The effect of acceptance of an offer is provided in Article 18.2 of the CISG 1980 - “An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due to account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror An oral offer must be accepted immediately unless the circumstances indicate otherwise” Legally, the acceptance of an offer is only valid when it is delivered to the offeror However, an acceptance becomes legally valid only when it reaches the offeror if it meets the following requirements: As provided for by the CISG, in some cases an acceptance must be unconditional Although the offeree does not accept the offer in its entirety but introduces some new conditions, such acceptance is equally valid as unconditional acceptance, if the new conditions set forth by the offeree not change the main content of the offer (Article 19.2) - Acceptance must be delivered to the offeror within the time limit specified in the offer or within the reasonable time specified in Article 18.2 of the CISG 1980 - The reasonableness of time for legally valid acceptance is determined as: If the offer is made orally, it must be accepted immediately (except in special cases); If an offer is made by other means of communication, the reasonable acceptance time is the time that takes into account details of the transaction such as the speed of the communication media used by the offeror c Withdraw an acceptance provided for in Article 22 of the CISG 1980 “An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective” This provision is applicable in cases where the offeree has previously accepted the offer and expressed his opinion through a formal notice to the offeror but has subsequently changed his mind I not accept the offer and send a cancellation notice to the offeror II Inquiry, Offer, Counter-offer, and Acceptance Letters Inquiry Letters a Requirements of Inquiry Letters - The letter of inquiry should be short, clear, and directly focus on the main information to be asked - The tone in the inquiry letter should be polite and formal - Putting the company name at the top of the letter (or company's pre-printed letterhead) - Specifying the address of the company sent the letter to - Date should be skewed to the right b Contents should be included in an Inquiry Letter In the content, we need to inform the shipper what kind of goods we are in need of, ask the shipper to send the Catalog, product sample and simultaneously the price, quality of the goods, the required quantity to be supplied, and the delivery time, payment conditions and other necessary conditions, etc c Format of Inquiry Letters Opening: Mention that the purpose of the letter is to inquire about products and services State why we know the recipient (via the press, television, ) and introduce the company (the company's highlights) + Opening salutation: Dear Sir or Madam or To Whom It May Concern + Hints to the problem: Why we know products or the supplier of products: ● I am replying to your advertisement in… ● With reference to your advertisement (ad) in ● We are interested in … you advertised in … of last week’s issue ● Your advertisement (Your article in the paper ) on has come to our attention ● We were impressed by the … that was displayed on your stand at this year’s … Exhibition ● Regarding your advertisement (ad) in ● I have seen one of your safes in the office of a local firm and they passed on your address to me Or: ● We were advised by … of…(TCCI) that you are producing … ● The name of your firm was given to us/ were recommended to us by …, who have been regular buyers (purchasers/customers) of your products for some years ● We have been informed by …, with whom we have had business relations for quite a long time + Briefly introducing our company in a few sentences to make a good impression on the partner: ● We would like to take this opportunity of introducing ourselves as one of the ● We are a Company/ Corporation which specializes in… ● At present, we are in the market for… ● We are the manufacturer of We are looking for/ seeking for - Body: Mention the information to be asked (sample products, salary, quotation, contract conditions ) + To inquire about materials, samples, or molds of products, we can use the following sample email sentences: ● Would/ Could you please send me a leaflet/ We would be grateful if you could send… ● Will you please send me a copy of your catalogue and price list of , together with copies of any descriptive leaflets that I could pass to prospective customers ● Please send me a copy of your current catalogue I am particularly interested in safes suitable for a small office + Request more information: inquire more about the wholesale and retail price list, payment method ● I would also like to know ● Could you tell me whether …? ● We would also appreciate your letting us have full information regarding… ● Please would you send me an up-to-date price list, quoting your most competitive prices for your building materials ● We intend to place a substantial order and would like therefore to like to know what quantity discount you allow - Closing: + Express desire to get a quick response from the recipient and give thanks at the end of the letter ● We hope to hear from you in the near future ● If the price quoted is competitive and the quality up to standard, we will order on a regular basis ● If you can offer the concession we have asked for, we will place a substantial order ● Prompt delivery would be necessary as we have a rapid turnover We would therefore need your assurance that you could meet all delivery dates ● If the prices offered are competitive and the quality is of the standard we required, we will place large orders with you in the future ● If the product is satisfactory, we will place further orders with you in the future ● Provided you can offer favorable quotations and guarantee delivery within four weeks from receipt of order, we will place regular orders with you + Signature: Yours faithfully, Yours sincerely, Yours truly d Sample of Inquiry Letters Offer Letters a Regarding firm offers - Opening: Thank the customer for sending an inquiry letter to our company - Body: answer the questions of the buyer and send them catalogue, samples, price list, delivery time, method of payment, terms of discount - Closing: Indicates the expectation of the customer's reply and promises - Sample: b Regarding free offers Free offers mean that after we have searched for the customer's information (email, website, items that the customer is trading ), we actively write an email to the customer to express our desire to sell and cooperate with the customer 10 - Email subject: is an extremely important factor, deciding whether customers will open the Email or not; mention the benefits of the goods or make suggestions, the purpose of the email right in the subject line - Email content: write short, concise, not long, straight to the main issue Because customers won't have much time to read a lengthy email without mentioning anything Content should include: Introduce the company and a brief description of the company (what products the company deals in, main markets, ) Where we know customer information? What did we learn about the company or the customer's products (should take sentence to compliment the customer’s product)? Then introduce the product we want to offer to the customer We can write detailed product information on email, or we can attach a catalog with product information for customer reference At the end of the email, express a wish to have the opportunity to become a partner with them and hope to receive a response soon Note: Use polite sentences such as would like, could, thank you, look forward to… Go straight to the point of need to offer, email is concise but meaningful enough to make it easy for the recipient to absorb Do not use acronyms such as I’m, I’d like to… This will cause a loss of sympathy for the reader, and once the recipient does not read a message, the result is zero Do not forget to send a thank-you note at the end of the letter, sign and use the sentence pattern to expect a reply Sample: 11 Counter offer Letters a Form of a buyer's counter offer letter - Dear, - Opening: Thank the seller for the quotation for his company - Body: Present the conditions that are not suitable for your company Propose your conditions - Conclusion: Looking forward to hearing from the buyer - Signature b Form of a seller's counter offer letter - Dear, - Opening: Thank the buyer for his intention to buy and send the order to you - Body: State the conditions you cannot meet Recommend desired conditions - Conclusion: Looking forward to hearing from the buyer - Signature Sample negotiation sentences: - According to the quantity of your order, the price could be negotiable - If you increase your order, we could offer you a much higher discount We will accept your price reduction of 3% as in the introductory line - A 7% discount is the best we can offer you In fact, our products are the most suitable for your market Would you please think about the benefit you will get? Sample Counter offer Letter: 12 Note: When writing a counter offer, the previous bid is considered canceled In international trade, each transaction often has to go through many counters offers to come to an end Acceptance Letters - Acceptance letters from the buyer to the seller: Dear, Opening: State clearly that you accept the terms and conditions set forth by the seller If the Fax has already been sent, please confirm it again for clarity Body: Notice that I send "Buy Confirmation" and "Order" to the seller Notify the seller that you are prepared to open L/C for them if payment is by documentary letter of credit Closing: Hope the seller is interested in his order Signature - Acceptance letters from the seller to the buyer: Dear, Opening: State clearly that you accept the terms and conditions set forth by the buyer If you have already sent a Fax, you need to confirm it again for clarity Body: Clearly state the sale confirmation slip and the contract enclosed with the letter to the buyer Ask the buyer to open a letter of credit for you if you pay by L/C Closing: Thank the buyer for the order and ensure the best performance of the contract signed between the two parties Signature 13 Sample of an acception letter: Note: A valid acceptance letter must ensure: III - Completely, unconditionally - When the offer is still valid - Accepted by the offeree himself - Communicated to the offeror General example for Inquiry, Offer, Counter Offer, and Acceptance Two parties involved in this transaction are: Madam Hong Import Export AB (an enterprise specializing in importing Asian food products, one of the largest importers of Vietnamese rice in Sweden) Address: Elektronvägen 1, 141 49 Huddinge Tel: +46 6503 680 Email: info@madamhong.se Website: https://madamhong.com/ Mr Alex - Sales Manager Lotus Rice Co Ltd Address: 52 Street No 10, Himlam Residence, Tan Hung Ward, District 7, Ho Chi Minh, Vietnam Tel: (+84 28) 3622 2236 - Fax: (+84 28) 3622 2236 14 Email: bill@lotusrice.vn Website: www.lotusrice.vn Ms Van Anh - Sales Manager Inquiry Letter Madam Hong Import Export AB Elektronvägen 1, 141 49 Huddinge Tel: + 46 6503 680 Email: info@madamhong.se Website: https://madamhong.com/ February, 2022 The sales Manager Lotus Rice Co Ltd 52 Street No 10, Himlam Residence, Tan Hung Ward, District 7, Ho Chi Minh, Vietnam Tel: 84-28- 3622 2236 Fax: 84-28 3622 2236 Email: bill@lotusrice.vn Website: www.lotusrice.vn Dear Sir or Madame, We were impressed by the poster that was displayed on your stand at “The EXPE” International Trade Fair in Thailand last month We would like to take this opportunity of introducing ourselves as a Switzerland company which specializes in the import and distribution of Asian food We would be grateful if you could send us an up-to-date price list and some samples of your products, together with copies of any descriptive leaflets that I could pass to prospective customers We would also appreciate your letting us have full information regarding FOB Ho Chi Minh City Port prices, terms of payment and earliest delivery date If the prices offered are competitive and the quality is of the standard we required, we will place large orders with you in the future We look forward very much to receiving samples and quotation from you soon Yours faithfully, Mr Alex Sales Manager 15 Offer Letter The sales Manager Lotus Rice Co Ltd 52 Street No 10, Himlam Residence, Tan Hung Ward, District 7, Ho Chi Minh, Vietnam Tel: 84-28- 3622 2236 Fax: 84-28 3622 2236 Email: bill@lotusrice.vn Website: www.lotusrice.vn February, 2022 Madam Hong Import Export AB Elektronvägen 1, 141 49 Huddinge Tel: + 46 6503 680 Email: info@madamhong.se Website: https://madamhong.com/ Dear Sir Thank you for your letter of 1, February 2022 We have the pleasure informing you that we can supply you any quantity from tons up to 15 tons monthly According to your enquiry and your requirements, we are pleasured to send our offer with terms and conditions as follow: Commodity: Unit price: White Rice USD 422 / ton, FOB HCMC Port (Incoterms 2020) Jasmine Rice USD 522 / ton, FOB HCMC Port (Incoterms 2020) Packing: In new single PP Woven Bags of 5kgs net each Payment: By irrevocable L/C at sight Shipment date: Within 10 days after order confirmation and we have received L/C Inspection: By SGS We have sent you 02 samples of each commodity by DHL on 09 February 2022 We look forward to receiving your order soon If you require further information, please contact with us Please notice that this offer is valid until 18 February, 2022 Yours faithfully, Ms Van Anh 16 Sales Manager 17 Counter offer - Buyer's Counter Offer Letters Madam Hong Import Export AB Elektronvägen 1, 141 49 Huddinge Tell: + 46 6503 680 Email: info@madamhong.se Website: https://madamhong.com/ 15 February, 2022 The sales Manager Lotus Rice Co Ltd 52 Street No 10, Himlam Residence, Tan Hung Ward, District 7, Ho Chi Minh, Vietnam Tel: 84-28- 3622 2236 Fax: 84-28 3622 2236 Email: bill@lotusrice.vn Website: www.lotusrice.vn Dear Ms Van Anh, Thank you for sending us your samples and quotations We are interested in the White Rice at USD 422/metric ton, FOB HCMC Port (Incoterms 2020) We find that this kind of product is more suitable for our market than the other one in your offer, but the prices are not much competitive compared with other suppliers’ We wonder if you would kindly consider reducing the price to USD 410/MT If you could come down to this price level, we might be able to order MTS Your consideration of this matter and immediate reply would be appreciated Yours faithfully, Mr Alex Sales Manager 18 Counter offer - Seller's Counter Offer Letters The sales Manager Lotus Rice Co Ltd Address: 52 Street No 10, Himlam Residence, Tan Hung Ward, District 7, Ho Chi Minh, Vietnam Tel: 84-28- 3622 2236 Fax: 84-28 3622 2236 Email: bill@lotusrice.vn Website: www.lotusrice.vn 20 February, 2022 Madam Hong Export Import AB Elektronvägen 1, 141 49 Huddinge Tell: + 46 6503 680 Email: info@madamhong.se Website: https://madamhong.com/ Dear Mr Alex Thank you for your letter of February 15, 2022, In which you suggested reducing the White rice unit price If you agree to buy 10 MTS of White rice or more, we can accept your suggesting unit price at USD 410/MT FOB HCMC Port Please understand our situation and we look forward to having your order in soonest to arrange the cargo in good time Yours truly, Ms Van Anh Sales Manager 19 ... for Inquiry, Offer, Counter Offer, and Acceptance 14 Inquiry Letter 15 Offer Letter 16 Counter offer - Buyer''s Counter Offer Letters 17 Counter offer - Seller''s Counter. .. Offer, Counter -offer, and Acceptance Letters Inquiry Letters a Requirements of Inquiry Letters - The letter of inquiry should be short, clear, and directly focus on the main information to be... supply you any quantity from tons up to 15 tons monthly According to your enquiry and your requirements, we are pleasured to send our offer with terms and conditions as follow: Commodity: Unit