The Settlement Of Trade Letters Of Credit On Soft Terms And Countermeasures

With the development of economic globalization and international trade relations becoming closer and closer, as a major settlement in today's international trade, Letters of Credit's status and importance have drew more and more attention. As the bank credit, L/C resolved the business credit crisis. Its strict trade rules have well protected the interests of buyers and sellers.However, as a coin has two sides, while L/C has brought safety and convenience to the settlement of international trade, its own inherent characteristics also gave us a lot of trouble. Except for the L/C fraud that being a hot controversy in both theoretical and practical fields, the problems of soft clauses are growing more fiercely. Since the soft clauses can badly damaged the interests of the beneficiaries, resulting in depriving their rights of being paid or even cheating them of the goods, we must have a deep research on this issues and strive to find effective ways to reduce or even eliminate this kind of problem from occurring, to allow L/C play its "life blood of international commerce" role better.This paper begins with the introduction to the concept of soft clauses and the causes, trying to express the idea in simple ways, so that the trade operators will have a clear understanding and knowledge of the type of soft clauses and can identify them easily. Then from a legal point of view analyzing the nature and effect of the soft clauses and giving a conclusion and analysis of the current views and opinions of scholars in this field, then from aspect of China and International Chamber of Commerce's attitude towards the effect of the soft clauses to explore, allowing the trade operators have a deeper understanding of soft clauses from a legal point of view. Then, I discussed the remedy ways of soft clauses and the current difficulties faced by remedy. Finally, from the stand point of protecting the interests of the beneficiaries, I put forward some personal suggestion for avoiding the risk of soft clauses and improve the credit system, looking forward to helping those new trade operators.