Research On The Legal Problems Of Documentary Draft

Compared with domestic trade, international trade is much more complex andsubject to various factors. The main tools of international payment include promissorynotes, cheques and bill of exchange which is applied more extensive. Bills ofexchange often-used in international trade are mostly documentary draft.Documentary draft is very important as one of the main tools of international payment.But, from the view of international trade practice, one simple payment tool can’talways satisfy the requirements of the transacting parties, and they often use theintegrated payment tools, such as the combination of draft and collection, thecombination of draft and letter of credit, the combination of collection and letter ofcredit, etc. Therefore, the research on the tools of international trade payment ismostly concentrated on the bill, collection, letter of credit, etc. Further, the research ismostly concentrated on the legal relationship of collection and letter of credit ignoringthe function and effect of documentary draft played in these payment tools, therefore,study on documentary draft in the field of negotiable instruments law andinternational trade is very rare. Documentary draft has special legal structure which isdifferent from light ticket. What relationships between draft and documents can play afunction of ensuring transaction payment security, so as to ensure the interest balanceof both parties in international trade? These doubts are not explained reasonably inexisting research. Therefore, the author in this paper will analysize the legalrelationships of documentary draft, and then put the analysis into the often-usedinternational trade payment to understand the whole picture of documentary draftlegal relationships. Because of lack of the research material on documentary draftdomestic and abroad, the author finds the characteristics of the documentary draft andlegal relationship by the means of research on the combination of collection and letter of credit theory and practice, which itself is a kind of innovation and challenge. Thereare deficiencies in this article on the foreign language material grasp andunderstanding, and deep theoretical discussion of documentary draft the legalrelationship.The author in this paper will combine bill legal system and international tradelaw system, analysize basic relationships of documentary draft and specialrelationships of documentary draft in specific international payments according to thetheory of negotiable instruments law starting from the structure and function ofdocumentary draft, and draw some suggestions in prefecting the legal system of bill.The author will also discuss legal relation of the documentary draft under the l/c bythe means of hermeneutics, comparative analysis and empirical analysis methods, combining domestic and foreign legislation and judicial practice in our country.This article is divided into four chapters.Chapter Ⅰ is the basic research on documentary draft mainly about the origin,legal nature and function of documentary draft. The first section analysizes the originand development of documentary draft. The origin of the draft is the foundation offorward documentary draft, and the documentary draft takes the balance of interests ofboth parties in international trade payment as the background. Because of itsguarantee functions of accompanying documents, documentary draft is widely usedand then perfected by the L/C. The second section defines the connotation andproperties of documentary draft. First of all, the author on the basis of the concept ofthe bill refers foreign related concept, defines documentary draft, and clarifies itscharacteristic of accompanying the shipping documents. Then the author discusses thelegal nature of documentary draft, documentary draft itself has the characteristics ofthe draft, naturally inherits the bill attributes. The third section expounds in detail thesettlement function, the financing function, the L/C function and double restrictionfunction of documentary bill in the international settlement, which show that theexistence of documentary draft is necessary.Chapter Ⅱ is the external analysis on the basic legal relationships of documentary draft. The first section analysizes the documentary draft construction and the partiesconcerned to understand its whole process. The second section tries to discuss thebundled relationship in documentary draft. According to the drawer and the bank’sdifferent meaning, transportation securities guarantee function for documentary draftpayment show the pledge of rights, trust transfer and commercial lien, and the authordiscusses the ownership of the subject in documentary bill circulation under the threerelationships. The third section analysizes the differences between documentary draftand general draft in parties, drawn, acceptance, endorsement, etc by discussing theapplication mechanism of documentary draft in international payments and financing.Chapter Ⅲ is research on the particularity of the legal relationships documentarydraft under letter of credit. The author will firstly discuss the particularity of legalnature of documentary draft under L/C and the relationship between documentarydraft and L/C by interpreting the legal nature of L/C, and secondly study on theparticularity of documentary draft legal relationships by discussing specific billbehaviors and bill rights of documentary draft under L/C. First of all, the authorclarifies the legal nature of the L/C as a kind of special institutional arrangements bythe explanation of the various theories about the legal nature of the L/C, and thenexplains the relationship between documentary draft and L/C and the necessity of itsexistence under L/C. In the following three sections, the author discusses thedifferences between documentary draft and general draft in basic relationship, billbehavior and bill rights, which are mainly manifested in the documentary draft partystatus, issuing, endorsement, acceptance, payment and negotiation on the right ofrecourse.Chapter Ⅳ discusses the conflicts and difficulties of documentary bill in theapplication of the law based on the first three chapters. First of all, the author drawsthe application standards of laws against the law conflicts of documentary draft, andthen puts forward legislative suggestions on the general law and perfection of therelevant provisions of the variable type bill in China. Secondly, the author analysizesthe difficulties of applying Negotiable Instruments Law in form, endorsement rules and the negotiating bank position under l/c in order to protect the particularity ofdocumentary draft better. At last, the author outlooks the electronic documentary draft,discusses the difficulties of law application in the development of electronic paper andelectronic documents and puts forward legislative suggestions for NegotiableInstruments Law and other relevant laws in written form, signature and evidenceeffect. Here, the author implements a thought, that is, for documentary draft lawapplication difficulties, we can interpret them by Negotiable Instruments Law andrelevant modification, rather than blindly requirements for new legislation.