The Independent Principle in Letters of Credit

A bank in New York issued a letter of credit to a beneficiary (seller) in Spain at the request of the buyer to cover the shipment of building products. When seller presented the documents to the bank for payment, the bank declined to pay on the ground that it had no opportunity to test the quality of the products. The letter of credit did not require that a testing certificate from an independent laboratory accompany the documents.

Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.

1 thoughts on “The Independent Principle in Letters of Credit

  1. marizonilogert says:

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