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Goods are deemed to be in course of transit from the time when they are delivered to a carrier by land or water, or other bailee, for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee.
Damages for non-acceptance.-Where the buyer wrongfully neglects or refuses to accept or pay for the goods, the seller may maintain an action against him for damages for non-acceptance.
Damages for non-delivery.—Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may maintain an action against the seller for damages for non-delivery.
In either of the two foregoing events, the measure for damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of contract.
Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been accepted or delivered, or, if no time was fixed, then at the time of the refusal to accept or deliver as the case may be.
Pricing of Goods. It is perhaps desirable to explain the method of ascertaining the percentage which it is necessary to add to the cost price of goods in order to cover a given discount off the sale price. For example, if a manufacturer wishes to sell his goods with a discount of 20 per cent., what percentage should be added to the cost to cover the discount? This is ascertained as follows:
then complete the problem in the form of a Rule of Three sum, thus as 80 is to 100 so is 20 to the percentage required :
20 × 100 80 = 25, the percentage required.
This is proved as follows :-
The following is another example, which must be calculated in a different manner :- -If we have bought goods costing us net, say, 5 shillings per yard, and we wish to sell them with a discount of 10 per cent. on the selling price and make a profit of 5 per cent. on the cost, at what price should we sell? The calculation is as follows:-'
If it were desired to make a profit of 5% on the selling price of the goods mentioned above, the calculation would be as follows:—
100 less 5% and 10% = 85. of 5/- 5/10.588.
Average due date (or Equation of Payments). In actual business it is often necessary to find the average date of three, four, or more payments, or deliveries or shipments of goods, of different amounts made on different dates. For instance, supposing goods to the value of £360 were shipped on July 1st, £150 on August 2nd, £250 on Sept. 3rd, and £300 on Oct. 5th, and it was arranged to draw from the average date, what would be the average date? The problem is solved by taking one of the dates (the earliest usually) as the basis, computing the number of days from that date to each of the other dates and multiplying each amount by the number of days, then totalling the amounts and the products, dividing the latter by
the former and adding the quotient thus obtained to the date fixed as the basis, which gives the average date. The above example would be worked out as follows:
gives August 17th, which is the average date in this case.
The same result may be obtained by taking the last date as the basis, and deducting therefrom the quotient obtained, thus:
5th gives August 17th-the same date as that obtained by the first method of calculation.
The term term "Foreign Exchange" means international exchange of money, or in other words the liquidation of debts between two countries by an exchange of the money of one country for an equivalent amount in the money of the other country.
There are four principal ways by which such an exchange may be effected, viz :—
(1) By the actual transmission of coin or bullion.
(2) By goods to the value of the amount due being sent for sale.
(3) By bonds or other international securities being sent for sale.
(4) By cheques and bills of exchange, payable in the country in which the debt is due, and drawn in the currency of that country.
The first three methods above-named are found in practice to be both cumbrous and expensive, and are seldom resorted to by merchants. The last named (viz., the remittance or the drawing of cheques and bills of exchange) is the method usually adopted. Thus, supposing you had sold goods to a customer in Berlin, he could pay you by remitting a draft payable in London, or you could draw on him for the amount and sell the draft to a bank or a bill broker in this country. On the other hand, if you had bought goods from a trader in Berlin, you could liquidate your debt by buying and remitting to him a bill on Berlin, or he could draw on you and sell the draft in Berlin to someone who wished to remit to England.
How money is transferred by bills of exchange.-In studying this question novices are generally at a loss to understand how money is transferred from one country to another by means of these pieces of paper. In reality the money is not transferred at all. The bills remitted are drawn against goods shipped (either by the remitter or by some other person) from the one country to the other, the money received from the sale of such goods being used to pay the bills as they mature.
The following example will perhaps serve to explain the matter more fully
Grayson Bros., of Bombay, have sold on account of Williamson
and Co., of Manchester, 10 bales of cotton goods, which realise, say, 9,600 rupees, and they want to remit the money to England.
If there were no banks in the place, they would go to the different firms who export produce from Bombay, and try to find one who was exporting to England goods of about the same value as the amount they want to remit.
They find, say, that John Moore has shipped to London 100 bales of cotton, value 9,600 rupees, for account of Messrs. Peterson & Co., of London. If such a thing as a bill of exchange were unknown, Grayson Bros. would pay the money to Moore, in exchange for a letter addressed to Peterson & Co., London, requesting the latter to pay the money, or its equivalent, to Williamson & Co., Manchester, and thus the indebtedness of Grayson to Williamson, and of Peterson to Moore, would be discharged.
In effect that is exactly what takes place when bills of exchange are drawn, except that for mutual convenience the operation is conducted through a bill broker or a banker, who buys a bill of exchange from the exporter and sells one to the importer. The importer and exporter, therefore, do not meet, and do not necessarily know that the money one wishes to remit is exchanged for the money the other has to draw. The bank in the one case sells at its selling or drawing rate, say 1s. 4d. (the price of the rupee), a bill on London for, say, £640-the equivalent of the amount Grayson Bros. want to remit-and in the other case buys from Moore at the bank's buying rate, 1s. 41d., his draft on London for £640 (the value of the cotton shipped) paying him the equivalent in rupees. The difference between the buying and the selling rate is the profit (in rupees) which the bank makes on the transaction.
It will thus be seen that Moore's 100 bales of cotton are in effect exchanged for Williamson's ten bales of goods. The process is exactly the same when bills are drawn on London in France, Germany, and other countries.