To be precise pays off, not only in letter of credit transactions.
In case you describe an amount, a quantity or unit prices and precede it with the qualifier
"about" or "approximately", you will get up to 10 % more or less. This is what Article 30 a UCP 600 provides for.
"The words "about" or "approximately" used in connection with the amount of the credit for the quantity or the unit price stated in the credit are to be construed as allowing a tolerance not to exceed 10 % more or 10 % less than the amount, the quantity of the unit price to which they refer."
Previously, Article 39 UCP 500 also listed the word "circa", however Swift message MT7 stopped using circa so that now only "about" and "approximately" remain.
Article 37 UCP 600 refers to the net weight, not the gross weight. Gross weight is commonly unerstood as the total weight of a containerized or packaged shipment, computed as the sum of net weight (weight of the item) and tare (weight of the container and packaging material).
The description of the goods in the shipping documents usually comprises packaging. When comparing the weight between the LC description and the description in a shipping document, tolerances exceeding 10 % are acceptable if the excess is within reasonable limits.
If the letter of credit does not state the quantity in terms of a stipulated number of packing units or individual items, a tolerance of 5 % more or 5 % less is allowed. However, the total amount of the drawings cannot exceed the amount of the credit.
According to a decision by the ICC, each individual partial shipment has to comply with the 5 % limit. "If one looks at the part delivery as the essential delivery (goods)description, the stipulation "+/-5%" refers to them. The consequence will be that the local amount also will be in the range of this qualification. "
Finally: The proviso that the amount of the credit must not be exceeded is of practical significance only for excess shipments within the permissible 5 percent tolerance. There is no provision in this article with respect to the amount to be drawn in cases of permissible short shipments .Under these circumstances,
no justification seems to exist for not tolerating, in the case of a 95 percent shipment, a tolerance of up to 5 percent downwards for the amount to be drawn under the credit.
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