UCP 600 Sub art 14 (d) & 14(h)

[NigelHolt]

Bill,

I certainly agree that ‘All terms and conditions must be complied with. All letters of credit must be read as a whole. The UCP must be read as a whole’. However, 500 13(c) and 600 14(d) are crystal clear. If a ‘condition’ is ‘non-documentary’ the credit must be treated as if it was never there in the first place in all circumstances and as a result absolutely no account may be taken of it. (Bogdan, please note.)

Also, I am not convinced there is any legal distinction between a ‘term’ and a ‘condition’, at least in English law. The Oxford Dictionary of Law, 5th ed., OUP, states:

"term n … 2. ANY [my emphasis] provision forming part of a contract. A term may be either a condition, a warranty or an innominate term, depending on its importance, and either an express term or an implied term, depending on its form."

In other words, a ‘condition’ is a ‘sub-class’ of ‘term’.

Furthermore, if nonetheless a distinction can be drawn, the fact is that PP3 is quite clear that ‘Goods of X origin’ is a ‘condition’ and thus undeniably contradicts your view that it is a ‘term’. (Of course, that does not mean your view is automatically wrong.)

Jim,

Your argument -if I understand it correctly- that ‘data’ not located in that part of the credit desribed as the ‘Description of Goods and/or Services’ or similar (e.g. field 45a of the MT700), could nonetheless form part of the ‘description of the goods’ referred to in 500 37(c) / 600 18(c)* is an interesting one and I certainly would not dismiss it out of hand (particularly in relation to 600). I would simply observe that this line of argument is seemingly rejected in PP3, in the third sentence of the last paragraph, in relation to 500. I think it fair to say that PP3 represents current i.s.b.p.

*and therefore not be an NDC and as a result simply not fall within the ambit of 500 13(c) / 600 14(h).

Overall, I regard it as a great pity that:
1. the UCP simply does not use
the expression ‘provisions’ rather than ‘terms and conditions’ , and:
2. the majority of NCs did not have the good sense to opt for the alternative to 500 13 (c) that was offered by the Drafting Group (effectively that an NDC must covered somewhere in the documents presented).
This would spare us the need for discussions such as this.

Regards to you all, Jeremy


[edited 12/7/2006 4:53:02 PM]

[KimChristensen]

I am really in doubt here as well – so this posting is just to say, that I agree fully with Jeremy at the outset here:

Even though the basic content of UCP 500 art 13(c) and UCP 600 14(h) is more or less identical, the fact that the position papers are no longer applicable under UCP 600 signals a real change here!
So until the Banking Commission “softens” this one I am inclined to read article 14(h) very literally.

Best regards
Kim

[KhalidI]

Bill,
For the sake of clarity, I never suggested that origin of goods is a term of the credit. However I am still doubtful, and like Kim inclined to interpret art 14 (h) very literally.
Regards Khalid