A preadvice credit is an irrevocable undertaking
A.To be irrevocable,operative credit must be issued
B.tRUE
C.False
D.Preadvice is not acceptable in UCP
WHY THE ANSWER IS B,I THINK A IS CORRECT TOO.
preadvice
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wongvv
- Posts: 83
- Joined: Fri Mar 20, 2009 7:50 am
little trick
Hi !
According to UCP600 Art 11 b, it states " issuing bank ....is irrevocably committed to issue the operative credit ot amendment....".
The answer A states "irrevocable....credit...", but the issuing bank can issue either irrevocable or revocable credit.
Hope it may help!
V.V.
According to UCP600 Art 11 b, it states " issuing bank ....is irrevocably committed to issue the operative credit ot amendment....".
The answer A states "irrevocable....credit...", but the issuing bank can issue either irrevocable or revocable credit.
Hope it may help!
V.V.
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SHAMEER
- Posts: 50
- Joined: Sun Mar 01, 2009 9:38 pm
preadvice
THE ANSWER IS B: ie,preadvice credit is an irrevocable undertaking
As per ucp600 art 11, An issuing bank that sends a pre-advice is irrevocably committed to issue the operative credit or amendment, without delay, in terms not inconsistent with the pre-advice
Regards,
MS
As per ucp600 art 11, An issuing bank that sends a pre-advice is irrevocably committed to issue the operative credit or amendment, without delay, in terms not inconsistent with the pre-advice
Regards,
MS
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Judith
- Posts: 118
- Joined: Thu Mar 12, 2009 8:59 am
True and False?
A pre-advice is not an irrevocable undertaking in the same strength as the credit under it is. Therefore, I would think the answer is C.
But the answer may easily be ‘B’ on account of the way the question is worded. Is a pre-advice an irrevocable undertaking given by the issuing bank to issue a credit? Answer is yes.
The key question is, what happens to a bank that does not issue an LC under a pre-advice? (Interestingly, UCP has not specified a time limit for banks to issue credit following a pre-advice.) I do not know the answer but I reckon that’s for courts to decide.
But the answer may easily be ‘B’ on account of the way the question is worded. Is a pre-advice an irrevocable undertaking given by the issuing bank to issue a credit? Answer is yes.
The key question is, what happens to a bank that does not issue an LC under a pre-advice? (Interestingly, UCP has not specified a time limit for banks to issue credit following a pre-advice.) I do not know the answer but I reckon that’s for courts to decide.
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iLC
- Posts: 504
- Joined: Thu Jun 26, 2008 10:33 pm
o boy!
its amazing. always simple looking question triggers a good discussion. we let me place my opinion here. first of all, UCP usually does not answer questions which start with "what if not.."
so UCP article 11 clearly says its irrevocable, so better take it as irrevocable.
is it a irrevocable undertaking to the beneficiary? well, i am not sure. it depends on the content of the pre advice. if the preadvice say that its a preadvice of a irrevocable credit, then it is a irrevocable undertaking.
looking simply; i agree with the answer given