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Simple English definitions for legal terms
S/D B/L
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A quick definition of S/D B/L:
A S/D B/L is a type of payment document that combines a sight draft (an order to pay money on demand) with a bill of lading (a document that shows ownership of goods being shipped). It is used in international trade to ensure that payment is made before the goods are released to the buyer. A draft is like a written order to pay money, similar to a check. There are different types of drafts, such as a clean draft (with no shipping documents attached) or a time draft (with a specified payment date). Draft can also refer to the compulsory enlistment of people into military service or the act of writing or composing something.A more thorough explanation:
Definition: S/D B/L stands for Sight draft with bill of lading attached. It is a type of draft, which is an unconditional written order signed by one person (the drawer) directing another person (the drawee or payor) to pay a certain sum of money on demand or at a definite time to a third person (the payee) or to bearer. A sight draft is payable on the bearer's demand or on proper presentment to the drawer. A bill of lading is a document that serves as proof of shipment and receipt of goods. When a sight draft is attached to a bill of lading, it means that the payment is due upon the delivery of the goods.
Example: An exporter in the United States ships a container of goods to a buyer in China. The exporter attaches a sight draft with bill of lading attached to the shipping documents and sends them to the buyer's bank. The buyer's bank will release the shipping documents to the buyer only when they pay the amount specified in the sight draft. Once the buyer pays, they can take possession of the goods.
This example illustrates how S/D B/L works in international trade. It provides security for the exporter that they will receive payment before the buyer takes possession of the goods. It also provides security for the buyer that they will receive the goods they paid for.