Payment Must Be Done Through L/C After Presentation Of Invoice

[simcorporate]

Dear experts,

I would like to ask you your opinions concerning following situation:

Applicant and beneficiary concluded the contract for delivery of goods.
According to the contract payment must be done through L/C after presentation of invoice and delivery act signed by applicant and beneficiary, but if the delivery act will not be signed after 20 days from its issuance it shall be deemed signed, becomes due and payable. Incoterms basis DDP territory of applicant.
Beneficiary wants to add to the L/C special condition "if the delivery act will not be signed after 20 days from its issuance it shall be deemed signed, becomes due and payable".
I think it will cause misunderstanding in the L/C that states:on the one hand "delivery act must be signed by applicant and beneficiary" on the other hand "if the delivery act will not be signed after 20 days from its issuance it shall be deemed signed, becomes due and payable".

The questions is: Will it be discrepancy if delivery act presented without applicant's sign, but L/C states both conditions?

Thank you for your opinions,

Best regards,

Simcorporate

[picant]

Hi Pal,

it is better to avoid in a l/c this wording.
I think that it may be worded:
-Invoice
-Presentation of a Delivery act signed by applicant .
-
47.
-applicant' signature of delivery act not required if the act has been issued 20 days before
presentation.
.delivery act must be issued after invoice issuance/date
-invoice dated before l/c issuance date not acceptable(art 14 i not applicable)

or the like
Too complicated!!!!!
Other comments appreciated

[kmahdy]

Dear Friend ,

ICC recommendations for letter of credit is to be clear and without any ambiguity ,

you need to state the document you need , the issuer , the text or statment , signed or not and by whom if its a document which issue is not stated in the ISBP or ucp600
.
and as for the un documentry condition , the subject condition is related to payment terms and not for the documents

regards

[cristiand969]

First of all you have no control for determining that such a document was not signed after its issuance where the document in question has not been dated. What means issuance in this context? Printing out from a computer, putting them on the issuer letterhead, its signing by the issuer but not the other party...?
I understand that the main concern of beneficiary is that the applicant will no longer want to sign document at the date of shipment, reserving his option to stop payment under L/C. This is a sound decision of the beneficiary who whishes to have an independent instrument which is not affected by the intervention of applicant: Pls refer to preliminary considerations of ISBP: A credit should not require presenation of doc that is issued/signed/countersigned by applicant.
I recommend the following wording instead:
- delivery act signed both by the applicant and beneficiary stating that ......
or
- Beneficiary's declaration stating that the delivery act could not be signed by applicant for reasons not attributable to the beneficiary.
This will secure beneficiary with the payment but also move responsability of acting in good faith to him.
.
PS From a legal perspective, an unsigned document could not be considered as signed if a certain time elapses. The silence of a party that is going to sign the documents is not construed as an implicit acceptance of it unless the applicable law or customary practice between parties allow so.
Good luck!

[simcorporate]

Thank you very much for your comments!

Best regards,

Simcorporate