On Relevant Legal Problems Of Demand Guarantee Letter In International Contract Project

Demand guarantee letter appears when commodity economy greatly develops. More and more opportunities of trading make merchants pay more and more attention on protection of transaction safety. Subordinate guarantee is not satisfying the requirements of economic activities, especially international economic activities, because defense from master contract will be defense to subordinate guarantee and will set obstacle when the beneficiary claims. Demand guarantee is designed to make changes. Demand guarantee letter is one of the mainly adopted tools, and has the advantages for its independence, unconditionality and documentality. It is a more direct way of protection to warrantees and is used widely as soon as it appears. We would see demand guarantee adopted in international goods trade, in international service trade, international financing and in international contract project as well. Most countries have established their demand guarantee letter systems in domestic law, while international convention and unification of international commercial rules about demand guarantee are made. Demand guarantee letter becomes not only an often used warranty tool but also a legal institution in international economic law. Everything has both positive effect and negative effect, and demand guarantee makes no exception. The feature of documentality and the existence of counter guarantee left room for fraud from warrantee. So principle of fraud exception is established to be a relief.In China, only subordinate guarantee can be adopted in domestic economic activities. Chinese scholars start their research work with experiences of other countries. They compare demand guarantee letter will standby letter of credit, and analyze the whole demand guarantee institution from the aspects of general principles. There is no research about sole demand guarantee letter in a very trade field. As a matter of fact, demand guarantee letter appears and is widely used in international contract project; to research demand guarantee letter in this field would help us re-understand it theoretically and give better guiding to practice. Thus, this thesis is titled 'on relevant legal problems of demand guarantee letter in international contract project'. Author analyzes the definition of demand guarantee letter in international contract project, its legal features, its legal sources, parties' rights and obligations and so on. This is in order to make clearer understanding about demand guarantee letter in international contract project and to give advise how to solve problem in China's international contract project practice. Besides the conduct and conclusion, this thesis is consisting of four parts.Part one is summarizing to demand guarantee letter in international contract project. Author starts with the history of demand guarantee letter in international contract project and compares different definitions in different countries. He points out that independence is its key feature. Then, He demonstrates its legal features, legal sources and different types in practice.Part two is legal analysis on demand guarantee letter in international contract project. Author does his research work from two aspects. One is analysis on basic clauses of demand guarantee letter in international contract project. Thought there are many different kinds of demand guarantee letter in international contract project, they all should contain certain clauses with legal meanings. The other is about operation institution of demand guarantee letter in international contract project.Part three is on principles of demand guarantee letter in international contract project. Author emphasizes on fraud exception.Part four is about countermeasure and present problems existing in China's demand guarantee letter in international contract project practice. Author demonstrates that the main problem is vagueness in law. So we should perfect laws and promote operation level.