L/C relates to a higher sum of money

ErnstRabel · Post by **ErnstRabel** » Sat Jan 10, 2015 9:04 am

A contract is made for the sale of 10 rocks at $1 each.

Later, the Seller receives a letter of credit for a sum of money “not to exceed a total of $20”. The packing list mentions: Not less than 10 rocks per shipment. Partial shipment allowed.

Would the bank allow the seller to receive the payment if he was to ship only 1 shipment of 10 rocks or does this L/C now forces the seller to ship 20 rocks in order to receive payment?

Thanks!

shahriar · Post by **shahriar** » Tue Jan 20, 2015 10:41 pm

Yes for both the questions. LC is an independent undertaking. Whatever is written there is effective irrespective of any contradictory clause in the contract

hardy2175 · Post by **hardy2175** » Mon Jan 26, 2015 4:59 pm

Any of the following are possible
1.Single shipment of 20 rocks
2.Single shipment of 10 rocks
3.2 shipments of 10 rocks each.
Infact instead of forcing the beneficiaries hand the LC forces the applicant to accept any of the above situations.

ErnstRabel · Post by **ErnstRabel** » Wed Jan 28, 2015 2:28 pm

Thank you for your comments!

L/C relates to a higher sum of money

L/C relates to a higher sum of money

yes

ROCKS

.