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ii. Kind and Quality of goods
Kind denotes the group, nature, batch no., lot no., etc. of the goods and quality refers
to the degree of goodness for satisfying one’s desires. Since, goods may be of various
kinds and quality, that should be clearly agreed by both parties before the trade dealing,
otherwise it may affect the value of the goods traded and disputes may exist in the future.
iii. Size and Colour
Size and colour also specify the goods. Sometimes, customers may make the
choice in terms of the size and colour of goods. In such a case, the buyer should clearly
state and specify about their size and colour, otherwise there may exist some sort of
misunderstanding between them.
iv. Price and Discount
Price and discount are the key factors in a trade. Price is the major factor in creating
demand and discount is the facility offered by the seller. Price determines the total value
of trade and discount reduces it and thus, price and discount determine the net value of
trade to be paid. So, the buyer and the seller should agree about the price of the goods and
their discount before entering into trade contract.
Discount is of two types, viz. trade discount and cash discount. Trade discount is the
rebate in the price of the goods which is made by the bargaining between seller and buyer
before buying the goods and cash discount is the rebate made in the net payable amount
for the payment made before or at the due date.

v. Packing of the Goods
Packaging refers to the covering of goods to save them from any sort of damage.
It also makes the goods look attractive. This is also a term of trade in the sense that
misunderstanding may create on this topic too. There can be a choice of customers on
packaging style. The packaging should be done according to the nature of the goods and
choice of the buyer, if instructed.

vi. Mode of Delivery
Delivery refers to the transportation of the goods upto the buyer. There are various
modes and means of delivery such as land, air and water transport. The buyer and
the seller should agree on the mode and time of delivery beforehand. Commonly the
most reliable but the cheapest and the fastest means should be chosen. The payment of
transportation is made as their agreement.
vii. Insurance
It is a process of transferring risk of individual entities to an insurer i.e. insurance
company to a specified extent of losses against the payment of a certain premium. There
are many chances of losses of goods in the transit. The buyer, the seller and even the
transport/carrier company should be clear about the terms of insurance whether it
is required or not and if required, who is liable to pay the premium and under what
situations etc. Otherwise there may create misunderstandings between them.

44 Aakar’s Office Practice and Accountancy - 10 Trade 45