Research On The Legal Issue Of Letter Of Indemnity

Trade of goods by sea is such an important part in the contemporary international trade system, and so is the marine letter of indemnity as a key point relating to the bill of lading transaction. Though the letter of indemnity is not necessary to each commercial trade, its active effect on the risks reducing and trade efficiency is significant. And it can also balance the benefits between the shippers, carriers, consignees and other participants. However, due to the lack of relating laws and rules, letter of indemnity in practice may sometimes cause additional risks or maritime frauds, do harm to the participants or more. In such circumstances, the author will carry out a variety of situations about the letter of indemnity on the basis of real cases in practice, analyzing its characters and effects in different circumstances. For the ultimate goal to optimize the"Maritime Law"in our own country and promote the development of international trade, the author will also give useful advices on improving the legal system and rules for letter of indemnity. The paper includes four chapters and will discuss the following issues.The first part begins with the history of letter of indemnity. Through the introduction of its development, gives a basic definition of it. Some legal issues are brought out under the summary of the status quo about letter of indemnity, to make a foundation for the later study.The second part expounds the two major classifications of letter of indemnity---the port of shipment and the port of discharge. The former one is focusing on the letter of indemnity for exchanging the clean bills of lading, combined with several typical cases, making the analysis on the reason of the courts'decisions, and giving the final conclusions on the applicability of such type of letter of indemnity. The later one is focusing on the letter of indemnity used under the circumstances on cargo delivery with the original bills of lading. Also, combined with some easy cases, a conclusion is made that we can judge the effect of letter through the will of participants', good or bad will lead to different results. Meanwhile, at the end of this chapter, to the consideration of risk prevention and maritime security, the author shows emphasis on the special points that should pay more attention in the letter of indemnity practice field.The third part begins to discuss the theoretical issues on the characters and effects of the letter of indemnity, and further points out that the rise of matters of letter of indemnity is mainly determined by the uncertainty of characters and effects. Through the study of theoretical achievements and attitude in different countries, definite the characters of letters of indemnity as a kind of contract, distinguish the external effect and internal effect of letter of indemnity, and point out that if the shipper has no idea of the carrier's or consignee's fraud attempt, and accept the letter of indemnity on good will, he can get the recovery of loss on the provisions of tort law. At the end of this chapter, author shows the legal consequences of invalid letter of indemnity, and turn from theory to guide practice operation.The last part is about the legal thinking of the letter of indemnity, combined with the problems of the bond analysis above, and summarized the legislative proposals and rules constructions in our country. An idea of solving the legal issue of letter of indemnity by the application of electronic bills of lading is provided in the end of the paper. It is also a major highlight of this paper.