Value Limit

Value Limit is a common term in foreign trade contracts, letters of credit, or customs regulations, referring to the maximum or minimum monetary limit set on the value of goods. It is commonly found in letter of credit clauses (e.g., 'the value limit of this letter of credit is USD 100,000'), tariff quotas (e.g., 'the in-quota tariff rate applies to imported goods with a value not exceeding USD 500,000'), insurance claims (e.g., 'deductible value limit'), and customs declarations (e.g., 'de minimis value limit for personal items'). Usage scenarios include: banks checking whether the invoice amount exceeds the limit during document examination; importers using value limits to avoid high tariffs; exporters ensuring their quotations do not exceed the purchaser's procurement value limit. Notes: A value limit may apply to a single shipment, a single transaction, or a cumulative amount; exceeding the limit may result in letter of credit rejection, additional taxes, or contract breach. Unlike a 'minimum price,' a value limit emphasizes the upper cap, while 'quota' often refers to quantity restrictions. Unlike a 'deductible,' a value limit applies to total value, whereas a deductible applies to the loss amount. Foreign trade practitioners should specify in the contract how the value limit is calculated (FOB/CIF) and whether freight and insurance are included.