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deliver documents on other terms and conditions
Posted: Thu Feb 19, 2009 10:01 am
by ofei
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.
I agree
Posted: Thu Feb 19, 2009 6:33 pm
by picant
Hi Pal,
Other terms and conditions will include "Free of payment" too.
Other comments appreciated
Ciao
in details?
Posted: Fri Feb 20, 2009 3:32 pm
by ofei
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
Other terms
Posted: Fri Feb 20, 2009 8:39 pm
by picant
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
contradictory clauses of URC522?
Posted: Sat Feb 21, 2009 8:18 am
by ofei
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
interesting discussion
Posted: Sat Feb 21, 2009 9:13 am
by iLC
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.