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Letter of Credit

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Sat, 11/19/2011 - 08:14
ahsan82
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Joined: 11/15/2011
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A bank purchased one set ofshopping document of 55000 usdoller in exchange of a letter of Credit  issued by bank of UK After getting the  documents.the opening bank protested to the negotiating bank about some descrepancies and error and refused to accept those shipping documents.In the mean time .the buyer refused to accept the goods  from the seller  due to sudden fall in price. again a garman party showed their eagerness to purchase the same goods at 10% discount.in these circimstances,goods are kept under the supervision of the shipping company .how can be the transaction resolved ? sate in the following contest

1) how can be goods sent to Garmany?

2)how can the first buyer(negotiating bank)of the shipping documents recover price of the sold merechandise?

3)prepare a shipping documents for Garman buyer

4)Obtaining the permission regarding discounting from the appropriate authority

please give me above4 questions answer

syed ahsan

‹ A Trading Joke (A Rare Commodity) good company and good product ›
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Thu, 11/24/2011 - 10:57
#1
Ramsundar
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Joined: 11/19/2011
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Letter of Credit

Hi, 

 1. Prima Facie Negotiating bank's negotiation is always with recourse to the beneficiary. Hence, the bank that has negotiated the docs with the bene can recover it from the bene. (It is a business call to recover from the bene as far as relationship with the customer is concerned)

2. Once the docs have been refused by the issuing bank due to discrepancies and the applicant is also not ready to accept the docs, it is the bene's head ache to sell the goods to the other buyer or to negotiate with the applicant to finish the sale with a reasonable price or to take back the goods etc., which is out of the purview of the LC.  and they need to deal as per their underlying sale of contract terms.

 

3. This shows the liabilities of the banks and the alternative course of action to be taken by the seller of goods. 

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Tue, 11/22/2011 - 13:39
#2
footstep
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Joined: 06/24/2011
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Bank guarantee and sblc

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