Let the Seller Beware

Paper Summary:

This paper examines how foreign trade and the exchange of goods would seem like a simple act at first, and how, in reality, there are many unforeseen circumstances that can arise during that transaction that can lead to the inability of the seller to provide the goods and the buyer to pay for those goods. It analyzes how this has led to an increasingly complex set of laws to help decide in what cases a party is entitled to recover the losses incurred from the inability to complete the transaction. It also shows how many of these laws are weighted toward the buyer and do little to protect the seller.

Outline
Negotiable Instruments
Special Situations Concerning Negotiable Instruments
Documentary Credits
Conclusion

From the Paper:

"Negotiable bills may not be due at the time they are made. Instead they may have a maturity attached to them at some later date. The note may set forth penalties or other remedies if the bill is not paid according to the terms. Notes have been a source of disagreement in International trade as they customs of different countries vary. For instance, there may be a difference in observed holidays between two countries and this can lead to a misunderstanding about when a bill is due. There may also be differences in whether a bill can carry interest or on taxation purchases. As one can see there are many areas in which disagreements can arise from the negotiation of these forms of payment. These differences have led to the development of a series of treaties and agreements between trading partners and countries surrounding and standardizing the use of these instruments."

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