Author Question: Employees of Mega Corp have gone out on strike seeking better pay. Mega Corp announces that if the ... (Read 122 times)

charchew · **on:** Jun 24, 2018

Employees of Mega Corp have gone out on strike seeking better pay. Mega Corp announces that if the union does not end the strike it will begin hiring replacement workers. Which statement is correct?
A)Hiring replacement workers during a strike is an unfair labor practice.
B)Mega Corp can only hire replacement workers if the collective bargaining agreement expressly gives the company the right to do so.
C)Mega Corp can only hire replacement workers if it gives the union 14 days' notice prior to actually bringing in the replacement employees.
D)Mega Corp can hire replacement workers at any time during a strike.

Question 2

Global MegaBank (GMB) issued an irrevocable letter of credit on behalf of its customer Beer Importers of America, Inc (BIA) for up to 150,000 covering shipments of Belgian Trappist Ales from Beer of the World Distributor (BWD). BWD subsequently presented its draft and commercial invoice with its name properly spelled as Beers of the World Distributor. The submitted documents also referred to the shipment of Belgian Abbey Ales although the shipments themselves were of Belgian Trappist Ales. GMB refused to accept these documents because of these discrepancies. GMB noted that use of the name Trappist is limited by Belgian law to 6 breweries operated by monastic orders in Belgium. By contrast, abbey ales are brewed by non-monastic entities under licenses to use the names of monasteries or religious icons in their titles. BWD claimed that GMB wrongfully dishonored the documents. BWD claimed the difference in names was excusable as a minor typographical error and that abbey and trappist ales are brewed in the same manner and thus so closely resemble one another as to excuse the discrepancy between the letter of credit and documents. Who would prevail in litigation between GMB and BWD? Please explain your answer. Would the result be different if the court was to apply UCP 600 or the functional standard of compliance? Why or why not?

iman · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

D

Answer to Question 2

The rule of strict compliance requires the terms of the document presented to the issuing bank to strictly conform to the letter of credit and the Uniform Customs and Practice for Documentary Credits (UCP). Even a small discrepancy can cause the bank to reject the documents. Utilizing this rule, the discrepancy in the name of the seller may be excused as a minor typographical error, but the discrepancy in the description of the goods would most likely result in its rejection. The result utilizing UCP 600 would be the same. If the discrepancy occurred in any document other than the commercial invoice, it would be governed by Article 14, which provides that data in a document...need not be identical to, but must not conflict with other data in the same document, any other stipulated document or the credit. The distinction between Belgian trappist and abbey ales is significant enough to create a conflict prohibited by Article 14. If the discrepancy was in the commercial invoice, Article 18 would require rejection as it provides the description of the goods, services or performance in a commercial invoice must correspond with that appearing in the credit. The functional standard of compliance in which a court examines the whole of the documents rather than requiring the mirror image of the letter of credit may provide some relief although the product descriptions are different enough to present problems for the seller.