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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 32086
Experience:  Over 5 years in practice
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i need help with Letter of Credit

Customer Question

i need help with Letter of Credit
Submitted: 3 years ago.
Category: Law
Expert:  UKSolicitorJA replied 3 years ago.
-Could you explain your situation a little more?
Customer: replied 3 years ago.

We are in the process to sign a deal with the Chinese to ship weekly x containers of bananas from Ecuador to China.. To facilitate the cash flow we asked them to pay 100% upon receipt copy of export docs.. The Chinese suggested LC... I am a bit weary about LC as it looks good on the surface but obviously banks can do difficult if a . or , are not on the right spot..

But there are more questions i have

1. what if the importer goes bankrupt.. Will the bank still pay out and who will be taking over ownership of the goods

2. apparently our receiving bank owns the bank in China.. would that complicate or ease the matter

3. is there anything that go wrong for the exporter that we release all documents but don't get paid while receiver will end up with the goods regardless!

4. can we put in the contract/agreement that we will hold onto ownership until payments have been transferred.. is this a separate agreement or written as part of the LC document

5. once setup.. should we have lawyers signing it off?