Question regarding Tolerance

Disclaimer

The names of the parties, as well as the data and information in the cases stated below, have been sanitized in order to protect the identity of the parties involved.
Our expert's responses to queries do not necessarily reflect the views of the ICC or the ICC Commission on Banking Technique and Practice. No legal imputation should be attached to any of the contents of the cases and no legal responsibility is accepted for any errors, omissions or misleading statements or opinions caused by negligence or otherwise. Our expert's responses are given for your reference only and you should not rely upon or act on our responses, of which we are not held liable. You should consult your legal counsel or other experts for their opinions in your specific cases.
No query or response can be reproduced in whole or in part without our express written permission.

Query from N.H.D.:
Dear all,

I wish to forward you a query that I have just received from a Vietnamese reader:

Quote

LC required:

LC amount: USD90, 521.50; Quantity of goods: 234.00MT; Total amount of goods: USD90,521.50 (LC not stipulated about unit price)

Partial shipment: Allowed

+/-10pct in quantity and amount acceptable

INV presented:

Quantity of goods: 225.00 MT

Unit price: 402.32

Total amount: USD90,521.50

Question:

Can we raise the discrepancy that the ratio between total amount of goods and the quantity not as per LC?

How to solve the problem of lack of quantity but IB must pay in full amount? (In case of no discrepancy)?

Unquote

My comment:

No. The invoice presented meets the requirement of LC and UCP 600 Article 30 (a).
The quantity of goods can be from 210.60MT to 257.40MT
The invoice amount can be from USD81,469.35 to USD99,573.65

The applicant bears the risk of any ambiguity in its instructions to issue or amend LC (ISBP para. 2).

Partial shipments are allowed, so further shipments may be made.

Looking forward to your further comments. Thank you.

Best regards,

N. H. D.

Response from T.O. Lee:
Dear N. H. D.,
The goods, even of the same kind, may be of different grades for different prices. The LC allows partial shipments/drawings.
So any combination is compliant provided the LC is not overdrawn in total shipments.
Hence the first shipment can be any quantity and amount provided it meets the common sense rule. One would not ship just 1/2 MT for one shipment for obvious reason.
T. O.

(905) 237-6465

(905) 237-6867