Greetings Everyone.
Our Private Banking Dept has asked us to vet the wording of a standby L/C they want to issue and one of the clauses to be included is:-" Except for article 17 of UCP no 500, this L/C is subject to UCP no 500."
What is the effect ,in practice of excluding the 'force majeure' clause, and does it have a significant effect on the Banks position with regards to the L/C.
Regards
Pete Flitcroft
Force Majeure
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KimChristensen
- Posts: 404
- Joined: Fri Apr 05, 2019 5:21 pm
Force Majeure
Dear Peter,
Good question. I think that if you exclude an article like #17, it would be only fair to include something instead!
The reason is that if you do not, then you can only guess the outcome of a case. Most likely it would be solved by local law; which would (again most likely) differ on this: A judge would probably choose another solution than provided in article 17 – since this one is excluded!
So my guess is that the “effect in practice” is that there is a considerable risk that the result would be different (e.g. that expiry date is extended until business is normal).
Best regards
Kim
Good question. I think that if you exclude an article like #17, it would be only fair to include something instead!
The reason is that if you do not, then you can only guess the outcome of a case. Most likely it would be solved by local law; which would (again most likely) differ on this: A judge would probably choose another solution than provided in article 17 – since this one is excluded!
So my guess is that the “effect in practice” is that there is a considerable risk that the result would be different (e.g. that expiry date is extended until business is normal).
Best regards
Kim