Study On The Legal Issues Of Standby Letter Of Credit

Currently, a standby letter of credit is increasingly extensively applied in international economic activities. To further normalize the practices of a standby letter of credit in the world wide, the International Chamber of Commerce made the International Standby Practices in 1998 by referring to Uniform Rules for Demand Guarantees, The Uniform Customs and Practice for Documentary Credits and United National Convention on Independent Guarantees and Standby Letters of Credit and in combination with the existing practices of a standby letter of credit. The International Standby Practices stipulate the legal systems and operating procedures of a standby letter of credit on a unified basis. The standby letter of credit, as an international financial tool with the functions of both guarantee and payment, has rather complex and unique legal systems. Therefore, the standby letter of credit has been a hot issue in international research, especially after the International Standby Practices have been put into practice. In China, more and more standby letter of credits are applied. However, no statute law and directive cases related to standby letter of credits have come into being, on the other hand, disputes relevant to standby letter of credits are increasing, which will prevent the development of standby letter of credits in China. Therefore, it is significant to do research on standby letter of credits in the theory and reality.The whole thesis is composed of 4 chapters except the preface and conclusion. Chapter 1 defines the standby letter of credit .The thesis first reviews the definitions of a standby letter of credit given by the international government and America, and then concludes the definition. By brief introduction of the operating procedures of a standby letter of credit, it is further defined.Chapter 2 discusses the legal nature and characteristics of a standby letter of credit. This article compares profoundly a standby letter of credit with commercial letter of credit, independent guarantees and bill to open out the legal nature and characteristics of law of a standby letter of credit. It is a peculiar letter of credit and special contract and it is irrevocable,independent,documentary and binding.Chapter 3 analyzes the principle of a standby letter of credit. The chapter firstelaborates the connotation and significance of the independent and abstract principle of a standby letter of credit, and then specifies the contents of it, finally discusses the challenge of the principle.Chapter 4 elaborates on the perfection of the legal system of a standby letter of credit in China. The chapter first makes a detailed analysis of and comments on the legal system related to a standby letter of credit in China. Then, the thesis lays an emphasis on suggestions made in terms of the perfection of the legal systems related to a standby letter of credit in China.