Commercial Invoice Discrepancy: Unit Price Not Matching Credit Terms
Introduction
When a commercial invoice states a unit price that does not match the price specified in the letter of credit, the examiner must determine whether the discrepancy is material. The price on the invoice must correspond to the credit's price terms, including any specified unit price, currency, and incoterms. The control question is whether the price data conflicts with the credit.
Google News RSS surfaced reporting on LC compliance and documentary discrepancies, including analysis of strict compliance in LC transactions. These provide the live context for this guide.
Failure Mode Analysis
Failure Mode 1: Rejecting an invoice for a format difference that is not a conflict
Format differences are not conflicts. If the credit states "$10.00 per unit" and the invoice states "$10.00/unit," the data is consistent. The examiner must assess substance, not form.
Failure Mode 2: Accepting an invoice with a price that conflicts with the credit
A price that is higher or lower than the credit's price is a conflict, unless the credit allows a tolerance. The examiner must compare the actual prices, not just the format.
Failure Mode 3: Failing to account for currency differences
The credit specifies a currency. The invoice must state the price in the same currency. A price in a different currency is a discrepancy, regardless of whether the conversion rate makes the amounts equivalent.
Failure Mode 4: Ignoring the impact of discounts or additional charges
If the invoice includes discounts or additional charges not contemplated by the credit, the net price may conflict with the credit's price terms. The examiner must assess the net price against the credit.
Deterministic Resolution Architecture
- Extract the credit's price terms, including unit price, currency, and any tolerance.
- Examine the invoice's price data for consistency with the credit's terms.
- Assess whether format differences are material conflicts or mere presentation variations.
- Determine whether the invoice's currency matches the credit's currency.
- Calculate the net price after discounts or additional charges.
- Compare the net price against the credit's price terms.
- If the price conflicts, request a corrected invoice or an amendment to the credit.
Conclusion
A unit price discrepancy on a commercial invoice is a discrepancy only when the price data conflicts with the credit's terms. Format differences are not conflicts. The examiner must assess the substance of the price data, not the presentation format, and must account for currency, discounts, and additional charges.
FAQ
Does a difference in price format create a discrepancy?
No. Format differences (e.g., "$10.00 per unit" vs. "$10.00/unit") are not conflicts. The examiner must assess substance, not form.
What if the invoice price is higher than the credit price?
A higher price is a discrepancy unless the credit allows a tolerance for price differences.
Can the invoice state the price in a different currency?
No. The invoice must state the price in the currency specified by the credit. A different currency is a discrepancy.
How do discounts affect the price assessment?
The examiner must assess the net price after discounts. If the net price conflicts with the credit's price terms, it is a discrepancy.
What if the credit is silent on the unit price?
If the credit does not specify a unit price, the invoice's price must not conflict with the credit's total amount. The examiner must assess whether the price data is consistent with the credit's terms.
Source Notes
- Canonical authority: UCP 600 Article 14(d).
- Live context: Dentons analysis "LCs, Strict Compliance and the Rogue Ampersand." The live article is operational context only; it is not used as the legal source.
| Regulation | Article / Section | Requirement | Consequence |
|---|---|---|---|
| UCP 600 | Article 14 | Standard for Examination of Documents | Binary determination (compliant/discrepant) |
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Quick Reference Summary
- No reference captured.
Compliance Checklist
| ✓ What Banks Expect | ✗ What Beneficiaries Often Do Wrong |
|---|---|
| Rejecting an invoice for a format difference that is not a conflict | Format differences are not conflicts. If the credit states "$10.00 per unit" and the invoice stat... |
| Accepting an invoice with a price that conflicts with the credit | A price that is higher or lower than the credit's price is a conflict, unless the credit allows a... |
| Failing to account for currency differences | The credit specifies a currency. The invoice must state the price in the same currency. A price i... |
| Ignoring the impact of discounts or additional charges | If the invoice includes discounts or additional charges not contemplated by the credit, the net p... |
← Scroll horizontally to see all columns
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