In comparison with domestic trade International train presents certain special problems:
1. Sellers in international trade are not able to assess the creditworthiness of the buyers as reliable and thoroughly as sellers in domestic trade
2. Transportation of goods is slower and less certain and communication less efficient and more time consuming.
3. Legal settlement process are complicated, tardy and expensive In order to cope with these problems, international trade relies considerable on three major documents on instruments that is trade draft, bill of lading, and letter of credit.
Trade draft: The international trade draft, also referred to as a bill of exchange, is a a written order by the exporter (the drawer) asking be importer (the drawee) to pay specified amount of money at a certain time. The draught may be a sight draft (which is payable on presentation) or a time draft (which is payable A certain number of days after presentation).
