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LAWS3165 International Trade Finance

Module Overview

This module examines various payment methods used for international commodity sales, particularly documentary credits. In every contract for the sale of goods abroad, the parties need to agree a method of payment. The way of payment in fact represents the reconciliation between the conflicting interests involved in international transactions. The seller’s interest is to obtain the payment as soon as possible, ideally before parting with the goods or at least the documents which can control the goods. The buyer, on the other hand, wishes to postpone the payment as late as possible, even until realisation of money by reselling the goods. To achieve a reconciliation of these conflicting interests, the interposition of banks is necessary. Therefore, the module starts by introducing different financial instruments commonly used in international trade transactions and then further examines documentary credits, which have been described as the life-blood of international commerce. The module is based on English law, which is typically chosen expressly by the trading parties, wherever they may be in the world. The module also looks at some of the many standard terms that are in common use, and in particular the latest versions of The Uniform Customs and Practice (UCP) and The International Standard Banking Practice (ISBP). As transport documents in international trade can largely affect the bank’s security in international trade finance, the module will pay close attention to the documents used in international commodity sales as well.

Aims and Objectives

Module Aims

• To give you a thorough knowledge and understanding of the main payment methods used in international trade transactions. • To provide you with a commercial insight of how international trade finance works and experience of examining legal principles deriving from the documentary credits practice. • To offer you some critical analysis on transport documents and their impacts on bank’s security. • To enable you to develop your skills of legal analysis and problem solving in a contract-based commercial law subject with an international aspect.

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • the main payment methods used in international trade transactions.
  • the features and principles of bills of exchange
  • the features and principles of documentary credits and the UCP.
  • document examination and rejection under documentary credits
  • transport documents and their links with bank’s security.
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • analyse relevant legal materials, including case law and relevant standard terms
  • identify and explain the contractual principles underpinning the law relating to documentary credits
  • describe and assess existing areas of debate about what the law is and what it ought to be
  • apply legal principles, with appropriate legal authorities, in the solution of complex problems.
  • display clarity and objectivity in written discussion demonstrating an awareness of issue of academic integrity
  • locate and analyse relevant legal and other primary and secondary source materials including international standard banking practice.
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • distinguish relevant from irrelevant materials
  • engage and apply comparative and critical approaches to a wide variety of issues
  • think critically, develop coherent arguments in writing and communicate these arguments;
  • exercise initiative, responsibility and creativity to conduct a piece of independent research and to engage with personal and professional development.


• Introduction to International Trade Finance: Roles and Functions • Methods Financing International Sales • Features and Principles of Bills of Exchange • Introduction to Documentary Credits and UCP • Fundamental Principles in Documentary Credits and Exceptions • Documentary Credits and International Sale Contracts • General Requirements for Document Examination under Documentary Credits • Special Examination on Transport Documents under Documentary Credits • Documents and Bank’s Security • Rejection and Documentary Credits Failure

Learning and Teaching

Teaching and learning methods

Teaching methods include The Module is taught by means of a weekly 2-hour lectures and fortnightly 1-hour tutorials. You will be provided with a detailed reading list, containing references to textbooks, statutes, cases, journal articles and relevant websites. There will also be problem questions to be used for discussion in tutorials. Lectures will introduce the main principles and structure of the subject. You are expected to provide the main input to the tutorials, where the main issues of law are discussed. Preparation for and participation in the lectures and tutorials will develop: • knowledge required to satisfactorily achieve the stated learning outcomes; • your ability to assess and comment critically on the effectiveness of others’ legal argument and to discuss and defend your own argument; • your ability to engage effectively with key legal research skills; • your organisational and time management skills. Learning activities include The most important part of learning is your own independent study. You will be expected to have read materials assigned and where appropriate to take full part in discussion of them with your tutor and fellow students. E-learning facilities are provided through Blackboard. The relevant websites and legal updates will also be listed there.

Preparation for scheduled sessions100
Completion of assessment task25
Total study time150

Resources & Reading list

M. G. Bridge (2014). Benjamin’s Sale of Goods. 

C. Murray et al (2012). Schmitthoff’s Export Trade: the Law and Practice of International Trade. 

A. Malek & D. Quest (2008). Jack: Documentary Credits. 

P. Todd (2003). Cases and Materials in International Trade. 

P. Todd (2007). Bills of Lading and Bankers’ Documentary Credits. 



Mock Examination


MethodPercentage contribution
Essay  (2500 words) 50%
Examination  (1.75 hours) 50%


MethodPercentage contribution
Essay  (2500 words) 50%
Examination  (1.75 hours) 50%


MethodPercentage contribution
Essay  (2500 words) 50%
Examination  (1.75 hours) 50%

Repeat Information

Repeat type: Internal & External

Linked modules

Pre-Requisite: LAWS3164

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