Understand the role of offer withdrawal and revocation and letter of credit types in cross-border e-commerce

In the context of law and cross-border e-commerce, the importance of the two concepts of “withdrawal” and “withdrawal” cannot be ignored. First of all, there are significant legal differences between the two definitions. Withdrawal refers to the act of the offeror taking measures to prevent the offer from taking effect before it becomes effective. According to the provisions of the Convention, even if an offer is irrevocable, the offer can be withdrawn as long as the notice of withdrawal arrives before or at the same time as the offeree. However, in an e-commerce environment, once an offer is made and reaches the offeree immediately, its withdrawal is almost impossible unless the offer information is delayed due to system errors.

The opposite of revocation is revocation, which means that after the offer takes effect, the offeror cancels the effectiveness of the offer in some way. In this case, the offeror needs to ensure that the notice of revocation arrives before the offeree makes a notice of acceptance. If the offer indicates a validity period or states its irrevocability, and the offeree has a reasonable basis to believe that the offer is irrevocable and acts accordingly, the offer will no longer be revoked.

In cross-border e-commerce transactions, the type of letter of credit is also crucial. According to the responsibilities of the issuing bank, letters of credit can be divided into irrevocable letters of credit and revocable letters of credit. Once an irrevocable letter of credit (Irrevocable L/C) is issued, the issuing bank cannot unilaterally modify or cancel it within the validity period without the consent of the beneficiary and relevant parties. This type of letter of credit provides relatively higher protection to the beneficiary and is widely used in international trade. For example, an irrevocable letter of credit should be marked with the word “Irrevocable” and include a clause that the issuing bank guarantees payment.

In contrast, a revocable letter of credit (Revocable L/C) allows the issuing bank to revoke or modify it at any time without the beneficiary’s consent. This type of letter of credit carries greater risks for exporters, so they are usually unwilling to accept it. At the same time, according to the relevant provisions of “UCP500”, as long as the beneficiary has obtained negotiation or payment guarantee under the terms of the letter of credit, such letter of credit cannot be revoked or modified. In fact, since most international letters of credit are irrevocable, “UCP500” also clearly states that if the letter of credit does not indicate “irrevocable” or “revocable”, it should be regarded as an irrevocable letter of credit.

It can be seen from the above analysis that understanding the withdrawal and revocation of offers and the functions of different types of letters of credit are crucial for all parties engaged in cross-border e-commerce.