Tolerance Allowed - UCP 600 Sub-Article 30 (C)
Posted: Thu Jan 15, 2015 4:25 pm
Hello everyone!
I am in need of your help with interpretation of UCP600 sub-article 30 (c).
We received L/C in amount of EUR 12.000,00, without any tolerance indicated.
Description of goods states: + 100 pieces of goods A at price of EUR 100 per piece.
Additional conditions states: Tolerance of +/-7% in quantity and unit price allowed.
Partial shipment not allowed.
Would you consider such additional condition in conflict with L/C amount not indicating any tolerance?
One opinion is that the tolerance in quantity and/or unit price shouldn't be allowed if there is no tolerance allowed in regard to the L/C amount. Also, if there is tolerance in L/C amount, quantity and unit price allowed, it shouldn't differ from each other. E.g. if tolerance in L/C amount +7/-9% is allowed, than tolerance in quantity and/or unit price should also allow +7/-9% only (presumably there is quantity and/or unit price specified as part of description of goods). If there is no tolerance allowed regarding L/C amount, than no tolerance (whatever value) is to be allowed regarding quantity and/or unit price.
Other opinion is that the tolerance in quantity and/or unit price should be allowed in whatever value even though no tolerance has been allowed regarding L/C amount. E.g. tolerance of +3/-4% has been allowed regarding quantity, tolerance od +5/-6% has been allowed regarding unit price, but there is no tolerance allowed regarding L/C amount which is considered to be ok, as long as L/C amount is not exceeded.
Second opinion is backed up by UCP600 sub-article 30 (c) which states:
Even when partial shipments are not allowed, a tolerance not to exceed 5% less than the amount of the credit is allowed, provided that the quantity of the goods, if stated in the credit, is shipped in full and a unit price, if stated in the credit, is not reduced or that sub-article 30 (b) is not aplicable. This tolerance does not aply when the credit stipulates a specific tolerance or uses the expressions referred to in sub-article 30 (a).
All comments shall be greatly appreciated.
I am in need of your help with interpretation of UCP600 sub-article 30 (c).
We received L/C in amount of EUR 12.000,00, without any tolerance indicated.
Description of goods states: + 100 pieces of goods A at price of EUR 100 per piece.
Additional conditions states: Tolerance of +/-7% in quantity and unit price allowed.
Partial shipment not allowed.
Would you consider such additional condition in conflict with L/C amount not indicating any tolerance?
One opinion is that the tolerance in quantity and/or unit price shouldn't be allowed if there is no tolerance allowed in regard to the L/C amount. Also, if there is tolerance in L/C amount, quantity and unit price allowed, it shouldn't differ from each other. E.g. if tolerance in L/C amount +7/-9% is allowed, than tolerance in quantity and/or unit price should also allow +7/-9% only (presumably there is quantity and/or unit price specified as part of description of goods). If there is no tolerance allowed regarding L/C amount, than no tolerance (whatever value) is to be allowed regarding quantity and/or unit price.
Other opinion is that the tolerance in quantity and/or unit price should be allowed in whatever value even though no tolerance has been allowed regarding L/C amount. E.g. tolerance of +3/-4% has been allowed regarding quantity, tolerance od +5/-6% has been allowed regarding unit price, but there is no tolerance allowed regarding L/C amount which is considered to be ok, as long as L/C amount is not exceeded.
Second opinion is backed up by UCP600 sub-article 30 (c) which states:
Even when partial shipments are not allowed, a tolerance not to exceed 5% less than the amount of the credit is allowed, provided that the quantity of the goods, if stated in the credit, is shipped in full and a unit price, if stated in the credit, is not reduced or that sub-article 30 (b) is not aplicable. This tolerance does not aply when the credit stipulates a specific tolerance or uses the expressions referred to in sub-article 30 (a).
All comments shall be greatly appreciated.