Article-34-UCP-600-Disclaimer on Effectiveness of Documents

A bank assumes no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document, or for the general or particular conditions stipulated in a document or superimposed thereon; nor does it assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods, services or other performance represented by any document, or for the good faith or acts or omissions, solvency, performance or standing of the consignor, the carrier, the forwarder, the consignee or the insurer of the goods or any other person.

Banks are required to examine a presentation on the basis of the documents alone, to determine whether or not the documents appear, on their face, to constitute a complying presentation, that banks have no liability or responsibility for matters such as the form, sufficiency, accuracy and genuineness of any presented document.

This article safeguard the banks; if a bank is acting in a good faith, there may be a condition of fraud or document doesn’t comply with the goods; bank deals with documents and if the document from its face looks good and suffice the need of the credit must be paid.

Example: Credit calls for third party pre-inspection certificate, same has been presented and comply as per credit requirement, later applicant ask issuing bank to stop the payment as the quality of the goods not up to the mark, a bank has to pay as per credit complied presentation.

Note: The phrase ‘on their face’ does not refer to a simple front versus the back of the document but extends to the review of data within a document in order to determine that a presentation complies with international standard banking practice and the principles contained in UCP 600.