Article

Topic: Underlying Transaction: Relationship with LC.

Note:

The U.S. District Court for the Northern District of Texas, Urbom, J., denied Motion for Judgment by owners of intellectual property rights but conditionally granted its Motion for a New Trial as to damages in an action for breach of contract brought by a toy distributor in a contract dispute over the distribution of 720,000 Barney and Baby Bop stuffed toys in Canada. Time was of the essence and the purchase was documented by a purchase order requiring shipment "A.S.A.P PREFERABLY NO LATER THAN APRIL". Payment was to be via LC which was amended to reflect latest shipping date of 10 July. The question was whether amendment of the LC connoted amendment of the underlying contract. The court, recognizing the independence principle, ruled that amendment of the LC was not determinative of the issue with respect to the purchase order and that a jury could have concluded that the LC amendment did not connote amendment of the P.O.

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