Payment terms in bulk closeout deals

Deposit plus balance on delivery is the most common: a percentage up front, the rest as loads are released. Payment against documents releases funds when shipping documents are presented, before the buyer has seen the goods. A letter of credit substitutes a bank's obligation for the buyer's, paying on presentation of conforming documents. Net terms, payment thirty or sixty days after delivery, are rarer in closeout because the seller is disposing precisely to get cash.

Only the last leaves the buyer holding funds at the moment it discovers a discrepancy.

A letter of credit pays against documents that conform to the credit, not against merchandise that conforms to the order. The bank does not inspect the goods and is not asked to. A buyer that has paid under a credit and then finds an assortment problem has a claim against the seller, not a way to stop the payment.

That is why the payment structure and the notice clause should be negotiated together rather than by different people at different times.

Three alignments matter. Release payment against loads rather than against the whole order, so exposure grows with delivery rather than preceding it. Hold a retention until intake is complete where the volume makes verification slow. And make sure the last payment falls due after, not before, the notice window closes, because a buyer with money still to pay has leverage that a buyer who has paid in full does not.