1. documentary credit
   1. what?
      1. method of providing payment
      2. stipulated documents
      3. security of payment
      4. financing of the importation to the benefit of the buyer
      5. smooth flow of internantional trade
   2. principle of autonomy
      1. independent of the underlying contract
      2. unaffected by disputes in the contract
      3. terms of credit and contents of documents
      4. reason
         1. hold up smooth running of international trade
         2. onerous investigations
   3. so?
      1. form of documents not underlying facts
      2. no need to speculate about the underlying facts
      3. make payment when presented with genuine documents specified in LC
      4. goods not of the quality contracted for
2. Banks
   1. Issuing bank
      1. issues LC
      2. authorises anothe bank to negotiate against stipulated documents being tendered
      3. make payment to beneficiary provided terms and conditions of credit are complied with
      4. undertaking of payment by itself or via another bank (drawee bank)
   2. confirming bank
      1. upon authorisation or request by issuing bank, this bank add its confirmation to the credit.
      2. confirmed irrevocable letter of credit
      3. hence same obligations to make payments to the beneficiary as the issuing bank
   3. advising bank
      1. credit maybe advised to beneficiary by this bank.
      2. bank has to take reasonable care to check the authenticity of the credit
      3. does not engage itself to pay
   4. nominated bank
      1. authorised by issuing bank to pay or negotiate
      2. nominated bank is confirming bank
      3. confirming bank in 1 country, but another bank to negotiate in another country
3. incoterms 2000
   1. what?
      1. eliminating uncertainties
      2. encountered in the different interpretations of the trade terms prevailing in the respective countries where the parties conduct their businesses
      3. trade practices vary
      4. incoterms not binding unless expressly incorporated by parties into a contract.
      5. done by means of a clause in the contract
   2. how?
      1. list of duties, include in sales contract not exhaustive
      2. may vary and supplement to adapt the terms to particular transaction they wish to carry out
   3. main coverage
      1. respective rights and obligations of buyer and seller
      2. expenses arising out of the transaction in performance of the contract
      3. risks and insurance coverage
      4. shipment of cargo to a specified destination
      5. location of delivery of the goods by the seller at the port of shipment\origin
      6. contingencies ( in the absence of nomination or notice by buyer )
      7. transport documents
4. FOB and CIF
   1. FOB
      1. goods placed on board the ship by seller at port of SHIPMENT
      2. risk transferred to buyer when goods pass over ship's rail
      3. seller bears all cost and risks of conveyance up to the ship's rail
      4. buyer pays the rest of the transit costs, sea freight and insurance.
      5. buyer nominates ship
      6. seller takes reasonable action if information not provided
   2. CIF
      1. seller pays all costs, freight and insurance necessary to bring goods to named port of destination
      2. risk is transferred to buyer when goods pass over the ship's rail
      3. seller procures marine insurance against common risks during the carriage
      4. he pays the premium