Question

The general rule of law states that the Letter of credit is independent of the sales agreement between the buyer and seller. Discuss the accuracy the above statement with reference to decided cases. (35 Marks)

Guide for answering

1. Define- Sales contract in International Law (3 Marks)

2. Essential elements if International Sales contract [to show that in an international Sales Contract these elements must be present] (5 Marks)

Discussion (6 Marks)

• One of the elements in Sales Contract is payment
• UCP 600 Article 4 state that

Application: (2 marks)

#Writer is advice to discuss briefly the elements of Letter of Credit in the Sales Contract

• Although Letter of Credit is referred in a Sales Contract, its role is to merely identify the mode of payment and nothing more. The detailed functioning of the Letter of Credit has nothing to do with the Sales Contract

3. Letter Of Credit

3.1Definition of Letter of Credit (3 Marks)

3.2 Discuss briefly:

3.21 Advantages of Letter of Credit (6 Marks)

3.22 Disadvantages of Letter of Credit (4 Marks)

4. Whether the Sales Contract & Letter of Credit are independent or interdependent (4 Marks)

5. Conclusion (2 Marks)