Installment shipments refer to the practice of delivering an order in separate batches over a specified period, as outlined in a letter of credit. Each batch must be shipped within the time frame set by the letter of credit. If any installment is not shipped within the allowed period, the letter of credit may become invalid for that installment and any future ones, unless otherwise stated in the letter.
This term is commonly used in international trade and shipping law, particularly in transactions involving letters of credit. Installment shipments are relevant in cases where goods are delivered in parts rather than all at once, which can affect payment terms and obligations. Users may encounter related legal forms when dealing with contracts, shipping agreements, or letters of credit, and they can manage these situations with templates available from US Legal Forms.
Here are a couple of examples of abatement:
For instance, a company may order 1,000 units of a product to be delivered in four installments of 250 units each over four months. If the first batch is not shipped by the end of the first month, the letter of credit may no longer be valid for that batch, potentially affecting the entire order.
(hypothetical example) A manufacturer agrees to ship components for a machine in three separate deliveries. If the second delivery is late, the buyer may refuse to accept the third shipment based on the terms of the letter of credit.
| Term | Definition | Key Differences |
|---|---|---|
| Partial shipment | Shipping only a portion of an order at one time. | May not be defined in a letter of credit; can occur without installments. |
| Advance payment | Payment made before goods are shipped. | Focuses on payment rather than delivery schedule. |
If you are involved in a transaction that includes installment shipments, ensure you understand the terms outlined in the letter of credit. Keep track of shipment dates to avoid invalidating the agreement. If you need assistance, consider using US Legal Forms' templates for shipping agreements or consult a legal professional for complex situations.
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Missing a shipment date can render the letter of credit invalid for that installment and possibly for future ones, depending on the terms.