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ACCA Applied Skills · Corporate and Business Law (Global) · Transportation documents and means of payment

A credit requires presentation of a bill of lading showing shipment 'not later than 30 June'. The seller presents a bill of lading dated 4 July, otherwise fully compliant. The buyer, wanting the goods anyway, asks the issuing bank to pay. Which statement is correct?

The bank may reject the documents because the bill of lading shows shipment after the permitted date, which is a discrepancy. The buyer can waive the discrepancy and accept the documents, but the bank is not obliged to pay without that waiver.

  1. AThe bank must pay because the delay is minor and the goods were shipped
  2. BThe bank may reject the documents as non-compliant, although the buyer may waive the discrepancy and accept themCorrect
  3. CThe bank must reject the documents because the buyer cannot waive discrepancies

Explanation

The late shipment date is a discrepancy, so the documents do not strictly comply and the bank may refuse. However, the applicant may waive the discrepancy, and the bank can then pay if it chooses. The first option is wrong because strict compliance is required; the third is wrong because waiver is possible.

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