Avoidance of Contract :
– banking / letters of credit
In letters of credit, refers to the availability of documents in exchange for payment of the amount stated in the letter of credit. Availability options are....
(a) By sight payment
- payment on receipt of the docu¬ments by the issuing bank or the bank nominated in the letter of credit.
(b) By deferred payment
- payment after a period speci¬fied in the letter of credit, often calculated as number of days after the date of presentation of the documents or af¬ter the shipping date.
(c) By acceptance
: acceptance of a draft (to be presented together with other documents) by the issuing bank or by the bank nominated in the letter of credit, and the payment thereof at maturity.
(d) By negotiation
- meaning the giving of value by the nominated bank to the beneficiary for the documents pre¬sented, S”bject to receipt of cover from the issuing bank - letter of credit - bill of exchange - negotiation
Payment of a bill of exchange, which is the respon¬sibility of the drawee, can be either completely or partially guaranteed via an aval (joint and several guarantee), where the guarantor places his/her signature on the draft either alone or with corresponding explanation per aval or as guaran¬tor. If other information is lacking, the guarantor commits him/herself on behalf of the issuer - bill of exchange.
A loss to a shipment of goods that is less than a total loss. It comes from the French word avarie, which means damage to ship or cargo, (and ultimately from the Arabic word awarijah, which means merchandise dam¬aged by sea water).
(a) A particular average
is an insurance loss that affects specific interests only.
(b) A general average
is an insurance loss that affects all cargo interests on board the vessel as well as the ship herself.
particular average - general average - with average - free of particular average - deductible average
(a) The average quantity or volume of an inven¬tory item held over a specified period of time (e.g., monthly, annually)
(b) The average value of an inventory item held over a specified period of time.
Avoidance of Contract
The legal cancellation of a contract because an event occurs that makes performance of the contract terms im¬possible or inequitable and that releases the parties from their obligations - commercial frustration; commercial impracticability; force majeure.
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