Jaiib recalled questions

 RECALLED QUESTIONS 

Ques: The importer has ordered to buy 100 cars under LC from an exporter to be delivered in India. The exporter started working on it and after sometime exporter went to bank for some cash to get this work done on time but when he visited the bank the bank said that the importer has asked us not to pay any money and import will cancel this order.

The exporter asked from bank that on what ground the importer is cancelling this order.The bank said since there is nothing written on LC whether it is revocable or irrevocable so Importer can cancel the order.

Now which statement is correct?

A- Import is correct here and hence the order stand cancelled.

B- Bank and importer are wrong here.

C- Importer can cancel the order anytime but he need to pay compensation to exporter.

D- The Bank is correct here because bank need to follow the order of his customer(importer) hence the order stand cancelled.

Answer:

B) Bank and Importer are wrong here because "if nothing is written on LC then as per UCPDC 600 guideline the LC is considered as Irrevocable".

Since nothing is written so it is an Irrevocable LC and hence the order can not be cancelled by Importer as per UCPDC 600.