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Dear Experts,

Good day

we request your support through some light on the below conditions given in URC 522 as conditions appears contradict and i believe that there must be some reason behind it

ARTICLE 7 RELEASE OF COMMERCIAL DOCUMENTS


a Collections should not contain bills of exchange payable at a future date
with instructions that commercial documents are to be delivered against
payment.

b If a collection contains a bill of exchange payable at a future date, the
collection instruction should state whether the commercial documents are
to be released to the drawee against acceptance (D/A) or against
payment (D/P).

Thanks & Regards
Dinesh Kumar

Hi Pal,

I think that the a.m. article refers to some Countries behaviour to put bills of exchange and instruct the bank to deliver douments against payment, as they need to have the bill of exchage accepted and then deliver documents against payment.
Other unknown!
Ciao

Hi Picant,

Thanks.

But as per the negotiable instrument act, the drawee has a commitment to pay to the drawer on the maturity date. if the drawer gets paid under collection, How will the commitment under the draft be nullified?

Thanks & Regards
Dinesh

Hi Pal,

Collection instructions will be indicated to avoid problems, probably actions required in the past and covered by art 10 and 15 of URC 322, to hamper such behaviours the URC 522 were modified.
I still have a booklet by the Swiss Bank Corporation(sic) Documentary Operations describing this type of collections.
Ciao