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Note: Cowealth Medical Science & Biotechnology Inc. (Seller), a Taiwanese distributor of "CyberKnife", a high-tech electronic surgery knife produced by Accuracy, Inc., its US manufacturer, agreed to sell ten units to World Capital Pacific Ltd. (Buyer), a Chinese company. Payments were by means of two LCs issued by HSBC and Agricultural Bank of China. Both LCs were subject to UCP500. The LCs provided that a balance of 10% of the amount invoiced would be paid after the products were installed or, in any event, after three months if Seller did not cause delay. Ninety percent of the amount invoiced was paid directly by Buyer, possibly due to problems with the LCs. In any event, Seller apparently was unable to draw on the LCs for the 10% balance, demanded payment from Buyer, and, having been refused, sued Buyer for US$2,081,000 in damages. On Seller's motion for partial summary judgment as to two of the three installments, a master granted summary judgment in favor of Seller. On appeal, Hon, J., affirmed.

Buyer had argued that the agreement had been modified by oral agreements and that Seller had acted in bad faith. The Judge rejected these claims, noting that an oral agreement contradicted a written one. This was supported in the Judge's view by UCP500 Article 3 (Credits v. Contracts), which provides that an LC is independent from the underlying agreement. He further dismissed the allegations raised by Buyer as "just moonshine in order to escape the liability for these two sums."

[JEB/plc]

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