Hi, I am looking for someone to write an article on commission on banking technique and practice Paper must be at least 1500 words. Please, no plagiarized work! The three contractual agreements are independent of one another. Thus the undertaking of a bank to honor the conditions under the credit such as acceptance, negotiation of bills or fulfillment any obligation cannot be entangled with the applicant of the L.C who can only deal with issuing bank or beneficiary separately.1
Unlike in UCP 400, Article 6 of UCP 500 does not mention if the L/C is revocable or irrevocable. This is in order to be consistent with commercial codes in other jurisdictions.3 Now under UCP 600, all credits are irrevocable unless otherwise stated.
This deals with the method of examination of documents. The article envisages that banks must examine the documents accompanying the L/C with reasonable care and ensure that the documents are on their face in compliance with the terms and conditions of the L/C. The compliance must be consistent with international standard banking practices. The bank’s responsibility for examining the documents is limited to the ones stipulated in the credit. As such, documents not mentioned can either be returned to the beneficiary or passed on without any comments. UCP 500 gives seven days for the banks to examine and decide whether to accept or refuse the documents. However, in the U.S. only three-days are allowed in most of the states. Further, an L/C with no documentary condition is not acceptable as per the article. The bank should disregard such conditions with no relation to documents.5 In fact, article 15 of UCP 400 has been substantially changed as Article 13 of UCP 500. This article has not taken care to prevent defensive L.C practices what are called spurious discrepancies under which banks reject payments.
Whenever documents are received, it is the duty of the bank to inform the presenter whether all the documents are on their face, in compliance with the .terms and conditions of the L/C. . .