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International Letter of credit to exporter

Please help with the following problem.

The manager of the international department of the McAllen Bank learns on the way to work that the ship on which a local exporter shipped some goods has sunk. The manager has received all the documents required in the letter of credit and is ready to pay the exporter for the shipment. In view of the news about the ship, the manager now knows that the foreign customer will never receive the goods. Should the manager pay the exporter, or should he withhold payment and notify the overseas customer?

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Problem: The manager of the international department of the McAllen Bank learns on the way to work that the ship on which a local exporter shipped some goods has sunk. The manager has received all the documents required in the letter of credit and is ready to pay the exporter for the shipment. In view of the news about the ship, the manager now knows that the foreign customer will never receive the goods. Should the manager pay the exporter, or should he ...

Solution Summary

The solution outlines procedures and responsibilities surrounding a letter of credit.

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