Beruflich Dokumente
Kultur Dokumente
A. Basic Concepts
1. Doctrine of independence
The independence principle of a letter of credit emphasizes that the
contracts involved in a letter of credit arrangement are to be
maintained in a state of perpetual separation.
2. Fraud exception principle
Fraud exception exist when the beneficiary, for the purpose of
drawing on the credit, fraudulently present to the confirming bank,
documents that contain, expressly or by implication, material
representations of fact that to his knowledge are untrue.
3. Doctrine of strict compliance
The doctrine of strict compliance provides that the documents
tendered by the seller or beneficiary must strictly conform to the terms
of the letter of credit.
4. Warehouseman’s lien
The following claims are included in the warehouseman’s lien:
1. All lawful charges for storage and preservation of the goods;
2. All lawful claims for money advanced, interest, insurance,
transportation, labor, weighing, coopering and other charges and
expenses in relation to such goods; and
3. All reasonable charges and expenses for notice and advertisements
of the sale, and the sale of goods where default had been made in
satisfying the warehouseman’s lien.
B. Rights and obligations of parties
Entruster
Entrustee
Applicant (Buyer)
The buyer obliges himself to reimburse the issuing bank when the
latter complies with the terms of the letter
Bank
The seller shall ship the goods to the buyer and deliver the documents
of title and draft to the issuing bank or confirming bank to recover
payment.
C. Remedies available
A. Requisites of negotiability
The requisites are the following
1. Must be in writing and signed by the maker or drawer;
2. Must contain an unconditional promise to pay or order a sum certain
in money;
3. Must be payable on demand or at a fixed or determinable future time;
4. Must be payable to order or bearer; and
5. When the instrument is addressed to a drawee, he must be named of
otherwise indicated therein with reasonable certainty,
B. Forgery and material alteration
Forgery
When a signature is forged or made without the authority of the person
whose signature it purports to be, it is wholly inoperative, and no right to
retain the instrument, or to give a discharge thereof, or to enforce
payment thereof against the party thereto, can be acquired through or
under such signature, unless the party against whom it is sought to
enforce such right is precluded from setting up forgery or want of
authority.
Material alteration
An alteration is said to be material if it alters the effect of the instrument.
It means an unauthorized change in an instrument that purports to modify
in any respect the obligation of a party or an unauthorized addition of
words or numbers or other change to an incomplete instrument relating to
the obligation of a party.
C. Negotiation
Negotiation is the transfer of the instrument from one person to another
so as to constitute the transferee a holder thereof.
D. Rights of a holder
1. Holder in due course
Like any other holder, a holder in due course may enforce the
instrument and sue thereon in his own name. He also holds the
instrument free from any defect of title of prior parties, free from
defenses of prior parties among themselves, and he may enforce
payment of the instrument for full amount thereof against all parties
liable thereon.
2. Defenses against the holder
Real Defense / Absolute Defense
Those that attach to the instrument itself and are available against all
holders, whether in due course or not, but only by the parties raise
them.
Personal defense / equitable defense
Those which are available only against a person not a holder in due
course or a subsequent holder who stands in privity with him.
E. Checks
A check is a bill of exchange drawn on a bank payable on demand.
INSURANCE
A. Basic concepts
1. What may be insured?
a. A future contingent event resulting in loss or damage
b. A past unknown event resulting in loss or damage
2. Insurable interest
It is an interest arising from the relation of the party obtaining the
insurance as will justify a reasonable expectation of advantage from
the continuance of his life.
3. Double insurance and over insurance
a. Double insurance exists when the same person/property is insured
by several insurers separately, in respect to the same subject and
interest.
b. Over-insurance exists when the insured takes out an insurance over
the property insured in an amount which is in excess of the value
of his insurable interest.
4. Reinsurance
Reinsurance is a contract by which an insurer procures a third person
to insure him against loss or liability by reason of such original
insurance.
5. No fault, suicide, and incontestability clause
a. No fault clause – Any claim for death or bodily injuries sustained
by a passenger or a third party shall be paid without the necessity
of proving fault or negligence of any kind provided the total
indemnity in respect of any person shall be fifteen thousand pesos
for motor vehicles.