Asked by Lindsay Stavnes on Jul 18, 2024
Verified
Canadian Farm Machinery Ltd. entered into a contract with High Seas Transportation, which set out the responsibilities of High Seas in delivering 100 tractors to Argentine Produce Inc. Argentine has not yet paid for the tractors. If this contract, along with any other required documents, and a sight draft are sent to Argentine Produce's bank, the bill of lading will not be released to Argentine Produce until it pays Canadian Farm Machinery, thus protecting Canadian Farm Machinery's ownership rights if Argentine does not pay.
Sight Draft
A financial document demanding immediate payment upon presentation to the drawee.
- Acknowledge the key functions and importance of international commerce transaction documents, like bills of lading and commercial invoices.
Verified Answer
TL
Tania LozanoJul 21, 2024
Final Answer :
True
Explanation :
The use of a sight draft with the bill of lading ensures that the documents necessary for obtaining the goods (in this case, the tractors) are not released to the buyer (Argentine Produce Inc.) until payment is made to the seller (Canadian Farm Machinery Ltd.). This process, often facilitated through banks, protects the seller's ownership rights by ensuring payment before the transfer of goods.
Learning Objectives
- Acknowledge the key functions and importance of international commerce transaction documents, like bills of lading and commercial invoices.