Reference no: EM133338546

1. You represent a New York bank that honored a demand for payment under a letter of credit that it had confirmed. The bank paid a local exporter that sold optical equipment to a Mexican company. The letter of credit was issued by Banco Santander in Mexico City and confirmed by the New York bank under UCP 600. Banco Santander has refused to reimburse your client bank. Your client received a notice of rejection by a SWIFT message seven days after their presentation to Banco Santander claiming that the goods were defective and their actual description did not correspond to those in the certificate of quality, which was more specific than the description in the invoice. Explain whether the Mexican bank has a valid ground on which it could refuse to honor your client's reimbursement claim.
2. Chase Bank financed the import of an expensive medical device for the Banner Medical Center (BMC) from ACE Korean Company. The device was transported to Los Angeles by Korean Air Cargo where damage to the device was discovered. Chase Bank deducted the sum it paid to ACE from the BMC bank account. Can BMC sue Korean Air Cargo under the Montreal Convention to compensate for the damage?
3. You represent CareLast Bank, which failed to timely execute a payment order. The bank received the payment order on June 5 but did not execute it until June 8. The customer, Mr. Wu, claims that the bank was negligent and that because of this tardy execution his counterparty seeks to rescind the contract for the purchase of grain because the time of payment was essential to the contract. Can Mr. Wu claim consequential damages from the bank?
4. The Government of South Africa is considering reforming its secured transactions law and has hired you as a consultant. It wants to know whether it should preserve some of the formalities presently applicable to security interests. Discuss the advantages and disadvantages of the current requirements that: i) all security agreements be notarized; and ii) reviewed by the registrar. You should also make recommendations to the Government for each item.
5. You represent Yuma Credit Union, whose client is a local distributor of parts for agricultural machinery. Some of the distributor's customers are retail stores in Mexico that typically order parts and agree to pay 90 days after their delivery. The Yuma Credit Union wants you to identify any potential risks in taking the accounts receivable owed by these Mexican retail stores as collateral for a loan. What do you advise them and why?