Hii All...

There is an incident happened here. My friend exported some goods to Taiwan. The payment term was irrevocable L/C. Now the buyer refuses to accept the goods stating that some of the goods are defective.

Now is it possible for my friend to receive any payment on L/C even if buyer doesn't accept the goods...?? What could be the problems occur for my friend or for any exporter if with whom this happens..??

Not accepting is not the same as refusing to pay.

If the buyer is dissatisfied with the products and returns them, there is not much your friend can do.

Quoting from [Nilay Jobanputra]:


Hii All...


There is an incident happened here. My friend exported some goods to Taiwan. The payment term was irrevocable L/C. Now the buyer refuses to accept the goods stating that some of the goods are defective.


Now is it possible for my friend to receive any payment on L/C even if buyer doesn't accept the goods...?? What could be the problems occur for my friend or for any exporter if with whom this happens..??

Payment was through LC in discharging port after Buyer inspect the goods?In this case your friend can not do anything.

Quoting from [Nilay Jobanputra]:



Hii All...



There is an incident happened here. My friend exported some goods to Taiwan. The payment term was irrevocable L/C. Now the buyer refuses to accept the goods stating that some of the goods are defective.



Now is it possible for my friend to receive any payment on L/C even if buyer doesn't accept the goods...?? What could be the problems occur for my friend or for any exporter if with whom this happens..??

    If it is a sight irrevocable Letter of credit: and if there is no any discrepencies in the submission of document, where is the palce for the  buyer to refuse for payment.??

submit the document to your bank and get the payment as per the LC terms.

If you are having any deviation from the LC terms it will be a probelm. As per your question an detials ,there is no refusal: I think you are wrong somewhere

Replying to [curdrice]: Yes. You need to read the LC wich your bank issued. Did it have any clause stating that "buyer acceptance required"..if it has then bad luck or else go ahead and request payment.

Replying to [Nilay Jobanputra]:If the L/C is Irrevocable 100% at sight and the exporter has routed all the documents thru the bank; then the bank is legally responsible to pay for the money.

While handing over the original documents to the importer bank make sure that they have the 100% amount towards the merchandise received from the importer.

Replying to [Nilay Jobanputra]: If not late, your friend can offer to buyer some credit note and finish this matter. And I hope that buyer is not so bad.

Quoting from [Nilay Jobanputra]:


Hii All...


There is an incident happened here. My friend exported some goods to Taiwan. The payment term was irrevocable L/C. Now the buyer refuses to accept the goods stating that some of the goods are defective.


Now is it possible for my friend to receive any payment on L/C even if buyer doesn't accept the goods...?? What could be the problems occur for my friend or for any exporter if with whom this happens..??

Your friend should be able to claim the money from the importer bank as the importer has received the goods under the irrevocable L/C terms.


Unless other clause is stated in the agreement or in the L/C which prevented your friend from claiming the money...


Cheers!!!

Replying to [Nilay Jobanputra]:I think the goods defective and the payment for the goods are two diffrent concept.But it maybe aslo depends on the clauses in L/C, your friend should check the L/C first.

Replying to [Nilay Jobanputra]:
LC is independent(self-governed) documents, so you can send the required documents to the bank and get the money.
The quality problem only can solve by contract term.

Replying to [Peter2000]:
push the impoter bank pay under L/C terms unless any clause on defective goods in terms.
good luck.