a). The terms of payment are a 90-day sight draft on documents against acceptance (D/A), subject to Uniform Rules for Collections (URC 522).

This means the seller draws a bill of exchange on the buyer (drawee) payable 90 days after sight, accompanied by shipping documents. The presenting bank releases the documents to the buyer upon acceptance of the bill (the buyer signs acceptance, committing to pay at maturity). Payment is made at the end of the 90 days. It provides credit to the buyer but risk to the seller, as title passes upon acceptance. Under CFR terms, risk transfers to the buyer when goods are loaded on the vessel at the port of shipment.

b). The instructions on the collection order (under URC 522) would typically include:

• Deliver documents against acceptance (D/A).
• Protest in case of non-acceptance.
• Case of need instructions (e.g., contact the seller or agent for further instructions if issues arise).
• Advise fate by SWIFT or airmail (notify acceptance or non-acceptance).
• Collect all banking charges from the drawee if possible, otherwise from principal.
• Do not waive charges.
• In case of non-acceptance, store goods and insure if necessary.
• The bill is subject to URC 522.

These ensure orderly handling, with practical examples in Ghana where banks like GCB use standard forms compliant with BoG and ICC rules.

c). Mr. Bob Ferguson’s suggestion is incorrect and risky.

Under D/A, the buyer accepts the bill and receives the documents before fully inspecting the goods, as acceptance occurs upon presentation, and goods may still be in transit or at port. Once accepted, the buyer is legally obligated to pay at maturity under the bill of exchange, even if the goods are later found not in accordance with specification. Refusal to pay would be a breach, exposing the company to legal action. Claims for non-conformity would need to be pursued separately against the seller or via insurance, not by refusing payment. In CFR terms, risk is with the buyer from shipment, so inspection should be arranged pre-shipment if possible. In Ghanaian practice, such assumptions have led to disputes, emphasizing the need for LCs over D/A for new suppliers.

d). The drawee can obtain a measure of protection in D/A collections by requiring an independent inspection certificate (e.g., from SGS) to be included in the documents, confirming goods comply with specifications before acceptance, or negotiating for a conditional acceptance clause if allowed.