Contract Final Payment

Contract Final Payment refers to the last payment made by the buyer to the seller in a foreign trade contract after the seller has fulfilled all delivery obligations (such as shipment of goods and passing inspection). Typically, international trade adopts a 'down payment + final payment' structure, with the final payment usually accounting for 70%-90% of the total contract value, depending on negotiation. Usage scenarios include: under a Letter of Credit (L/C), the final payment may be made at the time of negotiation; under Telegraphic Transfer (T/T), the final payment is often made upon receipt of a copy of the Bill of Lading or after the goods arrive at the port. Precautions: The conditions for final payment must be clearly specified (e.g., against Bill of Lading, inspection certificate), to avoid buyer default; it is advisable to distinguish it from down payment and progress payment—final payment is the last installment, while progress payment is made based on milestones. Unlike a 'retention money', the final payment is part of the main contract price, whereas retention money is a guarantee amount withheld from the final payment. Mastering final payment terms helps control collection risks and protect the seller's interests.