invoice containing 'free of charge' goods

NigelHolt · Post by **NigelHolt** » Fri May 11, 2012 1:00 am

Unfortunately I do not see that this opinion helps in any way to answer the fundamental, to me, questions I posed in my first posting, i.e.:
1. 'How do you decide if there are goods not called for in the credit?' and:
2. 'Does the fact that goods are free of charge of itself constitute prima facie evidence that they are not called for?'.

In the absence of clear, comprehensive, authoritative and widely disseminated guidance on the subject I see plenty of scope for dispute.

[edited 5/11/2012 12:08:48 PM]

YaffiD · Post by **YaffiD** » Mon May 14, 2012 1:00 am

Exactly what Jeremy emphasized. We received invoice indicating the correct description of goods . however, in the value coloumn it was indicated "free of charge".According to the checkers of docs in my unit, this is a discrepancy because it contradicts the primary transaction and LC which gave value to the goods shipped. unless the LC permits it, it should be regarded as discrepancy.
I am not totally convinced that this is indeed the case.
How do you consider such document if presented under LC (which does not specifically allows free of charge goods)

NigelHolt · Post by **NigelHolt** » Mon May 14, 2012 1:00 am

Yaffi,
At the risk of ‘going round in circles’, as indicated in my first posting, I am not certain of the answer to your question. I personally cannot see any grounds for the view that, in your example, the free of charge goods are not called for by the credit. In other words I do not regard goods being ‘free of charge’ as constituting automatic prima facie evidence that they are not called for by the credit.

YaffiD · Post by **YaffiD** » Mon May 14, 2012 1:00 am

tHE CHECKERS' OPINION IS THAT GOODS CALLED FOR IN THE CREDIT HAVE CERTAIN VALUE (THE AMOUNT OF LC) AND THEREFOR GOODS WITHOUT VALUE ARE SOMETHING DIFFERENT.

polterd · Post by **polterd** » Tue May 15, 2012 1:00 am

Since cannot be established if the furniture free of charges is of same type/quality/size,etc. with the furniture called for in the credit, par.64 of ISBP681 applies and documents are discrepant.
In my opinion, if l/c would have state "chairs model ABC brown" and the goods free of charges mentioned on invoice would have been the same "chairs model ABC brown" , the documents could have been accepted.
I think that different understanding of English language may cause different interpretation of the text
"merchandise not called for in the credit". What ICC is reffering to ?
To name/type of goods only ? Or to quantity also ?

NigelHolt · Post by **NigelHolt** » Tue May 15, 2012 1:00 am

To: YaffiD

I do not see how it can be assumed the underlying contract cannot have included the provision of ‘free of charge’ goods, as your document examiners seem to assume.

DanielD · Post by **DanielD** » Wed May 16, 2012 1:00 am

I do not know about the underlying contract but surely the credit should have specified "the free of charge goods" (same or not) in the description of goods. What can be assumed if that goods "free of charge" which are not part of the description are either "overshipped" goods or goods not called for in the credit. Daniel

YaffiD · Post by **YaffiD** » Wed May 16, 2012 1:00 am

Daniel. your reply is exactly what we think. the goods (free of charge) are not in accordance with lc terms. Would you too consider such invoice as discrepancy?

DanielD · Post by **DanielD** » Wed May 16, 2012 1:00 am

If your invoice shows "furniture" for the amount of the credit PLUS
"furniture" free of charge, there is either an overshipment or goods nod called for in the credit. So it is discrepant.
Daniel

NigelHolt · Post by **NigelHolt** » Wed May 16, 2012 1:00 am

Daniel,
It is with the greatest reluctance and trepidation that I question your views. However, here goes:
1. Why should an applicant think that they need to make especial mention of FOC goods, that the beneficiary has contracted to supply as part of the overall contract, in a credit? I cannot see it would be realistic or reasonable to expect them to be aware of the need to take account of the peculiarities of supposed ‘international standard banking practice’.
2. Surely in this case it cannot be said –other than possibly by reason of them being FOC- that the FOC goods are not part of the goods description? On the contrary the description of the FOC goods in this case is ‘bang in line’ with the goods description quoted in the credit.
Overall I remain of the view that para 64(b) is, at best, most unsatisfactory if not just simply a right load of old codswallop.
Regards, Jeremy