the first carrier for transmissions to the buyer in accordance with the contract of sale. If the seller is bound to hand the goods over to a carrier at a particular place, the risk does not pass to the buyer until the good are handed over to the carrier at that place.

Moreover, INTOTERMS only address passage of risk, not transfer of title. Who should be bound to the risks is not determined by which party possess the title of the goods. What’s more, the transfer of risks and passage of title are not require to occur simultaneously. That means, the plaintiff proclaimed that the defendant should bear the risks and be responsible to the damage of the goods for he remain the title of the goods is invalid. Hence, the loss must fall upon the buyer eventually. Suggestions:

It’s more than important to clarify the obligations and rights of different parties involved and to make sure the division of the risk when INCOTERMS are employed in the sales contract. When the sales is done with overseas party, to make it clear which laws and conventions are applicable.

CASE TWO

Background:

Sztejn V. J. Henry Schroeder Banking Corp.

Transea Traders in India contracted to sell hog bristles to Sztejn the plaintiff. A the request of Sztejn, the J.Henry Schroeder Banking Corp. (Schroeder), the defendant, issued an irrevocable letter of credit in favor of Transea covering the shipment of the hog bristles and payable upon presentation of certain documents, including a maritime bill of lading. Transea allegedly filled 50 cases with cow hair and other rubbish and delivered these to the carrier in order to obtain the required bill of lading. This bill, along with the other required documents, and a draft payable to Transea, were presented to Schroeder by the Chartered Bank of India, acting as an agent for Transea. Before Schroeder could pay on the credit Sztejn brought this action against Schroeder to enjoin it from doing so. Schroeder asked the court to dismiss the case. Schroeder also appealed to the court to dismiss the plaintiff’s motion. In the end, the defendant’s motion to dismiss the case is denied.

卖方印度Transea Traders公司（以下简称TT）与卖方，也是本案的原告Sztejn公司（以下简称S），双方签订食用猪的销售合同。应原告S公司的申请， J.Henry Schroeder Banking Corp. (Schroeder)银行，即被告方（以下简称SBC），开立以TT为受益人的不可撤销信用证，其中涵盖了食用猪的运输条款，并且提示银行见该信用证及相关单据，包括海运提单应付款至卖方。TT公司有意用牛毛和其他垃圾装了50箱货，并且将货运至承运人来获取海运提单。卖方即TT公司因此取得了本提单和其他银行要求的单据，然后来到印度的渣打银行，即卖方的代理人处，开立汇票。在SBC 银行见单据准备付款之前，S公司向法院申诉，要求禁止银行付款。并且，S公司向法院提出申诉，撤销本次销售。SBC银行向法院驳回原告诉求。最后，SBC银行，即原告的诉求被法院驳回。

ANALYSIS:

This is a case between the account party, the plaintiff ＆the buyer, and its issuing bank, the defendant. It’s an extremely rare case.

Normally, letter of credit is a pure documentary transaction. It is used by a seller to obtain prompt payment for his merchandises according to the original contract signed by both of the seller and the buyer. Letter of credit is also a self-sufficient instrument, which is independent from primary sales contract. So, there is only a circumstance in which the issuing bank refuses to pay upon the presentation of letter of credit and all required documents. That is, the documents are either forged or fraudulent. So, that makes up of two ways of seller’s fraud: 1.The documents that sellers presented are forged or fraudulent.

2.The goods delivered by the seller are not in conformity with the contract.

But the issuing bank is obliged to refuse to pay only under the circumstance that the documents are forged or fraudulent. The issuing bank will not really care whether the seller delivers the goods on time and at the right place or not, nor the goods

delivered are in conformity with the primary sales contract. The breach of warranty is not the interest of the bank. But this case is not merely a breach of warranty, regarding the quality of the merchandise. To begin with, it’s unclear whether the document that the seller presented are false or illegal. So that makes sense the issuing pay would honor the letter of credit if it was presented. But before the moment that the issuing bank is about to pay for the letter of credit, the buyer enjoins it from doing so because the buyer has already sensed there’s something wrong with the goods delivered. The buyer immediately informed the issuing bank that the seller has engaged in deliberate fraud. Since the buyer is the customer of the issuing bank, he is obliged to enjoin the issuing bank from the honoring the letter of credit. Moreover, it is the bank the

obligation to take primary liabilities for payment, which means the payment is done relying on bank’s credit. That’s why the proposal of the issuing bank about the case is eventually denied. Suggestions:

Even though the primary factor in the issuance of the letter of credit is the credit standing of the buyer, the security afforded by the merchandise should also be take into account.