Scenario - adapted from ICC Opinion TA756rev
Documents were presented under a documentary credit. The invoice, packing list and certificate of quality stated the goods description exactly as described in the credit but with the addition of the words "second hand'.
The question was whether or not this is acceptable. In this particular query, there was a difference of opinion between the parties as to the appropriateness of the additional wording; the confirming bank and issuing bank stated that delivery of second hand goods was not as required by the credit.
The counter-argument was that the goods description was in line with UCP 600 sub-article 18 (c) in that it corresponded with that appearing in the credit. It was further stated that no wording appeared in the credit requiring brand new goods, thereby meaning that the words ‘second hand' were not in contradiction to UCP 600 nor, incidentally, ISBP 682, paragraph 58 (now ISBP 745, paragraph C3) which stated that there is no requirement for a mirror image in the description of goods. In addition, and for clarification purposes, the certificate of quality confirmed that the goods were made of best materials in accordance with the original sales contract.
Nevertheless, the confirming and issuing banks re-iterated that the words ‘second hand' had changed the original description of goods stated in the credit.
Assessment
Reference was specifically made to two UCP 600 sub-articles:
It is not at all unusual for the goods description in documents, particularly the invoice, to display additional details to those stated in the credit. However, inclusion of the words ‘second hand' would indicate a different category or classification of the goods that is not apparent from the goods description in the credit.
Consequence
The addition of the words "second hand" is grounds for refusal on the basis that the goods description in the invoice does not correspond with that in the credit. Additionally, the description appearing in the packing list and certificate of quality, whilst only required to appear in general terms, conflicts with the description in the credit.