Chap013Cases

The Legal and Regulatory Environment of Business

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Case 13-1 (Chapter 13, p. 390) VOEST-ALPINE TRADING USA v. BANK OF CHINA 288 F.3d 262 (2002) FACTS: JFTC agreed to purchase 1,000 metric tons of styrene monomer from Voest-Alpine. At Voest-Alpine’s insistence, JFTC obtained a letter of credit from the Bank of China for the purchase price. Because of market changes, JFTC sought a price concession before shipment. Voest-Alpine refused the request and shipped the goods. A dispute arose over alleged discrepancies in the letter of credit. ISSUE: Did Bank of China give proper notice of refusal to Voest-Alpine? DECISION: No. REASONS: 1. The bank’s telex of August 11 did not reject the letter of credit. 2. Viewed in the context of standard international banking practices, the Bank of China’s notice was clearly deficient. 3. Since the Bank of China failed to provide adequate notice, the court does not need to reach the question of whether the alleged discrepancies warranted refusal. Case 13-1
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Chap013Cases - Case 13 Case 13-1(Chapter 13 p 390...

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