X enter into the agreement with Y whereby x was to deliver some goods to Y.the a

Question

X enter into the agreement with Y whereby x was to deliver some goods to Y.the agreement mentions that Y would provide X with a letter of credit by way of compensation the amount of which would be in conformity with prevailing market rate for such goods. however Y realize that a letter of credit would have to be very specific and as the compensation would depend upon the market rate he decides to make the payment in cash upon receiving the goods from X. when Y receives a communication from X to this effect he decide to sue X for breach of contract. X argues that as the agreement was conditional on the mode of compensation there was no obligation assumed by him if the letter is not provided. Is Xs justification Valid ?

Explanation / Answer

Yes, the justification of X is valid. The delivery of goods by X is dependent on Y's payment with a letter of credit. The contract is enforceable only if Y performed the condition of payment as specified in the agreement i.e. by using a letter of credit.

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