Question

true or false questions:

11. According to UCP 600, a tolerance not to exceed 10% more or 10% less than the quantity of the goods is allowed, provided the credit does not state the quantity in terms of a stipulated number of packing units or individual items and the total amount of the drawings does not exceed the amount of the credit.

12. Compared with an irrevocable letter of credit confirmed by the advising bank situated in the seller's country, the disadvantage with an unconfirmed irrevocable credit is that, should the issuing bank reject the documents, litigation will take place in a local jurisdiction.

13. According to UCP600, documents which appear on their face to be inconsistent with one another will be considered as not appearing on their face to be in compliance with the terms and conditions of the credit.

14. As in a voyage charter, under a time charter-party, the shipowner retains control of the ship and the employees on board the ship. However, the charterer is responsible for its deployment, the number of voyages it undertakes and the destination of the voyages.

15. Under common law, the shipowner is under an implied obligation to carry the cargo to the agreed destination directly without any deviation.

16. If the goods are lost or accidentally become damaged after shipment but before the goods have arrived at the agreed destination point, a seller having sold the goods upon C-terms has not fulfilled his contract and can therefore be held liable for breach of contract.

17. Bills of lading made out to named consignees, known as straight bills of lading, are documents of title.

18. where the loss is attributable to a number of proximate causes, and one of them is excepted, the insurer is liable for the loss.

19. Insurable interest is an essential requirement of a contract of insurance which distinguishes it from a wagering contract.

20. Bearer bill of lading states that delivery will be made to whosoever holds the bill. This document allows the goods to be delivered to the holder of it.

Answer 1

11. TRUE

12. False

While most issuing banks will prefer or insist that the state law governing letters of credit they issue be the law of the place of issuance or headquarters of the issuing bank, they will normally consent to jurisdiction and venue in the beneficiary’s location for resolving disputes between the beneficiary and the issuer. Should the beneficiary believe that the issuer has wrongfully dishonored the draw under the letter of credit, it will be able to litigate in the same court as it would if the issuer were a local bank. Since the law of letters of credit is fairly uniform in the United States, and most of the issues that will be of concern will be governed either by the UCP or the ISP (which is the same regardless of which state’s law governs the letter of credit), the choice of law of, say, New York instead of Florida or North Dakota to govern a letter of credit should not trouble the beneficiary

13. False

14. True

15. True

16. False

17. False

18. False

19. True

20. True

Bearer bill of lading states that delivery will be made to whosoever holds the bill. Such bill may be created explicitly or it is an order bill that fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery.

This document allows the goods to be delivered to the holder of it.