deliver documents on other terms and conditions

Simple is Beautiful; the only thing came in my mind when thought of documentary collection. And I think more and more people are thinking the same in these days. Documentary Collection offers us far greater security than selling on open account; but not as much as a documentary credit. We should therefore be more cautious before starting selling using this method of payment. Documentary Collection Forum is an effort to help you on this way – admin; besttradesolution.com
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ofei
Posts: 93
Joined: Tue Oct 28, 2008 8:51 am

deliver documents on other terms and conditions

Post by ofei » Thu Feb 19, 2009 10:01 am

Dear all,
Long time no see here.
I have another question on collection. Art 2 a III of URC522 indicates that documents may be delivered on other terms and conditions. I am wondering what it mean here by other terms and conditions. Does it include delivery of docs by LG, promissory note or trust receipt? How do you usually do in handling collection in this respect? Tks for your comments.

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picant
Posts: 2026
Joined: Wed Aug 20, 2008 1:49 pm

I agree

Post by picant » Thu Feb 19, 2009 6:33 pm

Hi Pal,

Other terms and conditions will include "Free of payment" too.

Other comments appreciated

Ciao

ofei
Posts: 93
Joined: Tue Oct 28, 2008 8:51 am

in details?

Post by ofei » Fri Feb 20, 2009 3:32 pm

Hi picant,
Tks for reply.But will you explain some other terms and conditions in details? I am heard that trust receipt is not justified in some countries. So is it commonly used?

Ofei

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picant
Posts: 2026
Joined: Wed Aug 20, 2008 1:49 pm

Other terms

Post by picant » Fri Feb 20, 2009 8:39 pm

Hi Ofei,

I know about, bank guarantee to pay at maturity, Drawee written undertaking to pay, Irrevocable letter of engagement by drawee, etc. , the importance is just to establish the collecting bank liability. I dont know the proper use of a Trust Receipt, but if it is only a drawee undertaking, it could be similar to an open account engagement, and may be in some Countries it could be prohibited, as the terms; drawee written undertaking, irrevocable letter of undertaking , but with the acceptance of a BOE too, there is only buyer's undertaking and not a bank undertaking to pay.

Other comments appreciated
Ciao

ofei
Posts: 93
Joined: Tue Oct 28, 2008 8:51 am

contradictory clauses of URC522?

Post by ofei » Sat Feb 21, 2009 8:18 am

TKS picant,
I am heard that the collecting bank won't be protected by URC if it delivering docs by other terms we mentioned here. So I am puzzled causes URC states in article 2 that the bank may deliver by other terms and conditions. But in article 7 of URC, it only indicates two kinds of types to release docs. Is it contradictory?
More comments appreciated.

Regards
Ofei

iLC
Posts: 504
Joined: Thu Jun 26, 2008 10:33 pm

interesting discussion

Post by iLC » Sat Feb 21, 2009 9:13 am

interesting discussion indeed. i have checked the commentary. nothing is there. anyway, in my opinion, under URC, the prime job of a collecting bank is to follow the collection instruction. delivery against payment and delivery against acceptance are the two most popular methods but there may be other ways depending on the bank's practice; not to mention without creating any obligation on the part of the collecting bank. trust receipt could be a way.

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