Cengage Advantage Books: Business Law Today, The Essentials 10th Edition by Roger LeRoy Miller

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Letters of Credit. Antex Industries, a Japanese firm, agreed to purchase 92,000 electronic integrated circuits from Electronic Arrays. The Swiss Credit Bank issued a letter of credit to cover the transaction. The letter of credit specified that the chips would be transported to Tokyo by ship. Electronic Arrays shipped the circuits by air. Payment on the letter of credit was dishonored because the shipment by air did not fulfill the precise terms of the letter of credit. Should a court compel payment? Explain. (See pages 725-727.)