Cee Company in Canada agreed to sell 10,000 “New coffee percolators in the manuf

Question

Cee Company in Canada agreed to sell 10,000 “New coffee percolators in the manufacturer’s original packaging, with standard manufacturer’s warranty,” from Schwartz, GmBH. Schwartz agrees to ship the percolators CIF, and Rousseau agrees to make payment by means of an irrevocable letter of credit. Rousseau contacts Thermidor Bank, which issues a letter of credit promising to honor a promissory note payable to Schwartz when it is accompanied by an invoice and a clean, on board bill of lading for “10,000 new coffee percolators in the manufacturer’s original packaging, with standard manufacturer’s warranty.” Rousseau learns from Weiss, a competitor of Schwartz, that even though Schwartz had obtained actual bills identifying the goods as “10,000 new coffee percolators in the manufacturer’s original packaging, with standard manufacturer’s warranty,” the percolators were actually used and inoperable. Is there anything that Rousseau can do?

Explanation / Answer

Rousseau can take following initiatives:
1.   Rousseau can ask for inspection certificate
2.   Rousseau can ask for a certificate of origin
3.   Rousseau can ask for the guarantee for standard manufacturer’s warranty
4.   Retention of some of the payment to Schwartz, unless percolators are checked for their operational efficiency

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