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Claim . Unpaid Cases Home > Helper
3-Credit v. Contracts

Case 1
The product description written on the credit reads "Java white granulated sugar". But the beneficiary issued and presented a original B/L that reads "Java white sugar" as a product description. As of a result, the opening bank rejected to meet payment due to the product description of the original B/L is discord to the terms of the credit. But the negotiating bank insisted that since the description "Java white sugar" is conforming to the product of the sales contract, they instituted a return demand lawsuit of the payment against the credit.

Conclusion
All the documents must be prepared based on the terms of a credit, not on the basis of a sales contract otherwise it would be consider as Discrepancy.

Case 2
The product description on a credit reads "Woman's Jacket" and it says "details as per offer no SB340". The seller indicated "Woman's Jacket" on the invoice and accurately prepared the sizes, quantities and all the types based on the offer sheet and sent it with other purchased documents to the opening bank. However, the opening bank rejected to meet payment declaring one of the item indicated in the commercial invoice conflicts against a item shown in the offer sheet.

Case study
This case can not be a dishonor case in accordance with Independence Principle of the Credit.
As prescribed by the Sub-Article 3(b) of Uniform rules for collection, a credit is a separate transaction from a sales contract or other contracts that it basis on, and a bank has no concern with such contract although there is an indication of reference s on a credit and it also stipulates that there is no binding whatsoever.
In practical affairs, you should not open a credit that goes by a product offer sheet or a contract as product details. There are some cases where you have to attach a sales contract or a product offer sheet to open up a credit. In this case, you should thoroughly review on the mutual consensus and make sure of the result.

Case 3
When opening a credit, a seller appointed and requested a "A" bank as a advising bank however, an opening bank unilaterally appointed a "C" bank as an advising bank and notified it to the seller. Hereupon, the seller complaint and requested to the opening bank to change the advising bank to the "A" bank. Then the prior opened credit was canceled and issued a new credit that appoints the "A" bank as a advising bank.
The seller requested purchase to the "C" bank according to the prior credit disregarding Amendment to Letter of Credit and presented shipping documents to the opening bank. The opening bank rejected to meet payment declaring breach of contract.

Case study
As prescribed by the Sub-Article 3(a) of U.C.P., a opening bank is not dominated by any claims or plea insisted base on the relations with an applicant, a opening bank and a beneficiary.
Furthermore, since an unilateral amendment by the opening bank without a consent of the beneficially is impossible, it seems there is no problem when requesting purchase to the "C" bank without the beneficiary consenting to the Amendment to Letter of Credit as stated in the prior terms.


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