ICC Digital Library Forum

We received the following query from a customer. Any responses welcome.
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When the word "undertaking" is used in the UCP does it have the same meaning as promise? E.g. - Sub-article 9(a) "An irrevocable Credit constitutes a definite undertaking of the issuing bank...."

We don't commonly use the noun version of undertake. We might undertake to do X but we mean we will try or attempt to do X rather than promise to do X. It seems clear that the UCP sees "undertake" to mean something closer to a promise than to an attempt. I need to clarify the use of the word for our people and don't want to mislead them by saying undertake equals promise if there is a more precise meaning.
[edited 3/19/02 5:44:41 PM]

I do not claim any expertise in the English language or legal terminology and therefore my opinions, which are given without responsibility/liability, must be read in this light.

Personally, I would describe an undertaking as a promise, in -what I consider to be- the everyday sense of the word. To me the nature of the ‘promise’ (or ‘commitment’ or ‘engagement’ etc) contained in the credit instrument is defined by Article 9 and other relevant UCP articles. Also, I do not share the views of the enquirer as to the interpretation of the verb ‘to undertake’, i.e. I do not believe that if one undertakes to do something it merely means one ‘will try or attempt to do X’. Rather, it means will definitely ‘do X’. Of course, I accept that external factors, which the promisor in unable to control or mitigate, may frustrate the ‘doing of X’. This view would seem to be supported by the Oxford Concise Dictionary (1982) which states:

“undert’ake …… bind oneself to perform, make oneself responsible for ……’.

Overall, I find this a curious enquiry, but I recognise I do not know its context.

In the context of Article 9 a, in my opinion, an undertaking means a commitment on the part of a bank to perform, based on the conditions contained in the credit, and subject to the UCP.

I would agree with Jeremy that it is not as vague as Derek suggests.

Laurence

This time I agree with Jeremy 100%. However, an "undertaker" is not the one who undertakes or a bank but a funeral parlour.

The Oxford Advanced Learner's English-Chinese Dictionary has a second meaning for this word to mean "start" to do something. However the UCP articles do not take this meaning.

We are expecting Hatem to give us his views since this is his strengths.

www.tolee.com

UNDERTAKING is a very formal word, which suggest both considerable forethought and the possibility of completion. UNDERTAKING also implies an element of risk.

As for PROMISE, it is like ASSURE, which is often designed to make someone feel certain but hardly GUARANTEE that the outcome will measure up to one’s expectations. PROMISE implies intention, not obligation, and every child knows that not all PROMISES are kept. The best example I can think of is the following sentence; My boss PROMISED me a rise in pay. In another sense, PROMISE indicates grounds for favourable expectation.

Another word, which might be considered in this context, is GUARANTEE. GUARANTEE assume for the quality of a product or for the performance of a service or obligation. Therefore UNDERTAKING is more precise because it refers to the obligation itself and not to the performance of that obligation.

Hope that this explanation help viewers understand why the word undertaking is commonly used in L/Cs transactions.


[edited 4/1/02 10:18:04 PM]