2.1.2. Business correspondence

Business Letters

Letter-writing is an essential part of business. In spite of telephone, telex, e-mail and telegraphic communication writing of letters continues to exist. In fact most telephoned and telegraphed communications have to be confirmed in writing. The letter is often an evidence of the arrangement or contract, and must therefore be written with care.

The Principle Types of Business Letters

Inquiries (Enquiries)

Seek details on price, discounts, price lists, catalogues, sam­ples and terms of sale (quality and quantity of goods, models or trademarks, terms of delivery and terms of payment).

Offers

Supply all the information requested, e.g. the name of the goods offered, their quantity and quality, price, delivery time or date, terms of payment, marking and packing instructions and other conditions. Refer to enclosures and samples, catalogues and other items sent by separate post.

Quotations

Propose products, fixed and negotiable terms, prices, transport and insurance costs, discounts, methods of payment; quote delivery.

Orders

Place orders for goods or services (give references to an ad­vertisement or catalogue, details of the goods required: quan­tity, quality catalogue number, packing, conditions and qualifi­cations, alternatives if the goods ordered are not available).

Acknowledgements

Give confirmation that the order has been received and take the repetition of the order. With small routine orders from regular customers this may be done by means of a ready-printed postcard.

Letters of complaint/claim

Seek reparation for some fault or deficiency, e.g. late delivery or repeated delays, unsatisfactory quality of goods, wrong goods or wrong quantity of items, etc.

Collections

Aim at obtaining payment of a debt (overdue accounts) at various stages: the 1st reminder, the 2nd reminder, and the final demand (to notify the buyer before taking legal actions to enforce payment).

2.1.3 Contract

A written contract of sale is made out in the form of a document signed both by the Buyers and the Sellers. When there is no necessity of introducing special terms and conditions into the contract of sale, association use standard form of contracts containing the following clauses (articles).

1. Naming (definition) of the Parties.

2. Subject of the contract and volume of delivery.

3. Price and the total value (amount) of the contract (including terms of delivery)

4. Time (date) of delivery.

5. Terms of payment.

6. Transportation on (carriage) of goods.

7. The Seller’s guarantees (the quality of goods).

8. Sanctions and compensation for damage.

9. Insurance .

10. Force majeure circumstances.

11. Arbitration.

12. General provisions.

Also there may be standard General Conditions which form an integral part of the contract and are either printed on the reverse side of the contract or at the foot of the face of the contract or attached to it.

In the case of a contract for machinery and equipment there may be other clauses : technical conditions, test and inspection conditions, requirements to technical documentation, supervision of putting the machinery into operation and sending specialists for the purpose of training of the Buyers’ specialists, the Seller’ obligations for technical servicing and like. These clauses may be included in the contract itself or in appendices to the contract which are an integral part of it.

When detailed special terms and conditions are introduced into the contract or the agreement, it is customary to draw up an individual contract or agreement in each particular case (e.g. a turn key contract). Sometimes organisations use standard forms of contract worked out by the biggest federations and association of merchants and importers, by exchanges, Chambers of Commerce, and like for use in a particular trade. These standard forms of contracts, for example, are used in grain trade, sugar, cotton and other trades.

According to the purpose and contents contracts can cover goods, services, patents, licences, technology and so on.

Writing the Contract

The process of writing a contract involves a number of steps: making an offer, negotiation (a.k.a.), and acceptance. These steps may be quick and easy, or they may involve months of negotiation and redrafting.

Step One: Making the Initial Offer

Your initial offer should present what exactly you will bring to the table in exchange for exactly what you expect in return. Terms set out should be precise, clear, and unmistakable. The items in question, be they labor or property, should be described in their legal terms and broken down to specifics.

For example, if you are selling a piece of property, the properties legal description such as lot size, structures included, and exact location need to be drawn out so that both parties are thinking about the same piece of property. If the contract is describing services that will be rendered, the terms that will need to be drawn out include: who will do the work, who the work is to be done for, when the work is to be done, where the work is to be done, how fees will be charged, what fees will be charged, when payment is due, and how payment is to be delivered.

Before you present your initial offer to the other party you will need to draft a copy of the contract. To do this you may want to look at a sample of a similar contract. Sample contracts can be found online, in books, and from similar companies. Many typical contract agreement templates can be purchased and downloaded online for a small fee. You can either use a template and enter the specific terms you want, or you can draft a contract from scratch.

Whatever choice you select you will probably want to outline the terms of the contract that you desire before drafting your contract. For example you will want to describe what you want, being as specific as possible, and you will want to describe what you are willing to offer in exchange. Again be as specific as possible. You will also want to keep the sentences short and too the point. This will help to eliminate confusion and it will make the contract easier to read.

Also make sure that you use headings that are logical and that are ordered in a logical manner. This will help the reader to navigate through the contract, and it will help you identify important terms and items during the negotiation process. Make sure that names, address, etc. are all spelled correctly and labeled appropriately.

When you start writing the body of the contract make sure that you define terms that could be confusing. For example define things like professional terminology that a layperson probably won’t understand, and define abbreviations and shorthand notations so that anyone reading the contract will be able to follow what is being discussed.

Another consideration that you should make while drafting your contract, is to identify situations that "could" happen down the road. This includes litigation of the contract. To provide for this situation you should include how this situation will be handled. For example, describe who will be responsible for attorney’s fees, court costs, etc. and what remedies will be available in case one of the parties breaches the contract. You may want to provide an "out clause" that allows the other party to breach the contract legally for a fee paid to you.

On the last page of the contract you will need to provide a space for the involved parties to sign and date the contract. You may need to provide extra signing space if more than one person from each side needs to sign the document before it is accepted.

Before bringing your draft to the negotiation table it is important to proofread your document for grammar, spelling, and punctuation. Go over your outline to make sure that you covered all of the areas that you needed to, and that everything that needs to be in the contract is.

Checklist:

Names of all parties involved, spelled correctly, and with proper titles.

Date the contract was drafted.

Your terms.

What you want in return.

Procedures for litigation and legal breaching of the contract.

Place for signatures.

Legally required statements or terms. (If this is a contract with a governmental agency you may have to include a statement of non-discrimination. Check the UCC and government websites for specific wording requirements.).

Step Two: The Negotiation Process

It's time to negotiate! Here are a few golden rules to successful negotiations:

1) Always try to negotiate for at least 15 minutes. Any less than that and it is unlikely that either party has had enough time to fairly consider the other side. Generally, the size or seriousness of the negotiation determines the amount of time needed to negotiate it. Setting a time limit is a good idea. Approximately 90% of negotiations get settled in the last 10% of the discussion.

2) Always offer to let the other party speak first. This is especially important if you are the one making a request for something such as a raise. The other party may have overestimated what you are going to ask for and may actually offer more than what you were going to request.

3) Always respect and listen to what your opponent has to say. This is important even if he or she does not extend the same courtesy to you. Do your best to remain calm and pleasant even if the other party is displaying frustration or anger. Remember some people will do anything to intimidate you.

4) Acknowledge what the other party says. Everyone likes to know that what they say is important. If the other party opens first, use it to your advantage, by paraphrasing what you have heard. Repeat their important ideas before you introduce your own stronger ones.

5) Pay attention to your own and your counterpartner's body language. Review the chart below to learn how to interpret body language during the negotiations. Make sure that you aren't conveying any negative body language.

Language to use to show understanding/agreement on a point:

I agree with you on that point.

That's a fair suggestion.

So what you're saying is that you...

In other words, you feel that...

You have a strong point there.

I think we can both agree that...

I don't see any problem with/harm in that.

Language to use for objection on a point or offer:

I understand where you're coming from; however,...

I'm prepared to compromise, but...

The way I look at it...

The way I see things...

If you look at it from my point of view...

I'm afraid I had something different in mind.

That's not exactly how I look at it.

From my perspective...

I'd have to disagree with you there.

I'm afraid that doesn't work for me.

Is that your best offer?

Body Language	Possible meaning
Avoiding Eye Contact	Lying Not interested Not telling the whole truth
Serious Eye Contact	Trying to intimidate Showing anger
Touching the face/fidgeting	Nervousness Lack of confidence Submission
Nodding	Agreeing Willing to compromise
Shaking the head/turning away	Frustrated In disbelief Disagreeing with a point

Step Three: Acceptance

After both sides have found the median ground that benefits both sides, an acceptance of the contract by both sides can begin. The acceptance process will involve finalizing the contract by all of the involved parties signing the contract. A third party witness or notarization of the document may also be required to make the document binding. However, this greatly depends of the type of contract you are dealing with, and how much security you desire. For example the sale of property will need to be notarized.