Research, A Number Of Issues The Letter Of Credit

The letter of credit, appeared in 19 century. Comparing with law's long history, is a fresh thing. Although the International Chamber of Commerce issued UCP for the reference, it itself, as a commercial custom, has no legal binding to relative parties. Furthermore, UCP failed to make out clearly definition in some aspects( whether by intention or not). Many countries, including China, have not written law with regard to the letter of credit. Therefore, until now there are lots of suspending issues about letter of credit.In view of lacking of written law, the author has to seek more information from the cases, including domestic and overseas cases. The author focused on the following mentioned issues: the important law and custom, the compliance or discrepancy of documentation, the issue of negotiation, fraud exception in letter of credit. The author wishes to point out the problems of current law and brings forward the suggestion about how to improve China written law of letter of credit.The author prefers to regard the letter of credit as a new relationship besides the traditional four kinds of relationship in civil law, which are contract, torts, negotionrum, restitution( unjust enrichment). Secondly, the author thinks the strict compliance can be explained by two principles: one is face compliance rule, the other is reasonable compliance rule.Thirdly, the author considers the reason of the improper enforcement of negotiation is not only the unclear regulation of UCP, but also lacking of good faith and stable judgement. Finally, the author explained how to define the material fraud and put forward the insufficiency of our country's written law.The letter of credit is a very popular tool of international settlement. There are huge quantity of dissension concerned letter of credit, especially fraud, which is threatening the payment under the documentary credit and international financial security. However, if there is no systematic written law of letter of credit, the judge and lawyer are definitely faced with great challenge. China has entered into the WTO. With the development of international trade, this article should be realistic and helpful to the China law study.