Independent Guarantees In International Trade Legal System

In traditional civil law theory, the guarantee has the subordinate. The invalidity of the main contract will surely cause the invalidity of the sub-contract. However, with the development of the international trade and diversification of the payment methods, subordinated guarantee is difficult to satisfy people's requirements at present. A bank will be apt to be involved into the lawsuit of the basic contract which may easily effect its good reputation. The beneficiary will not be paid unless experiencing a complicated process of lawsuit when they ask for payment. Therefore, an up-to-date and prompt-paid way of guarantee came into being, namely independent guarantee. Independent guarantee is that the guarantor, after receiving the commission from the applicant, issues a letter of guarantee to the beneficiary in order to promise that he will do the payment after receiving the claim for compensation and other ordered documents.The independent guarantee simplifies the process of claim of compensation and gets rid of the complicated lawsuit of the basic contract. The beneficiary will receive the payment immediately after he hands out the necessary documents. The applicant is also very willing to issue the letter of guarantee with the purpose of speeding up the implementation of the contract.While, because of the difference of the legal tradition and international trade status among countries around the world, the legal system is not perfect. Although the relevant international pact and convention have been existed, people in different countries don't know the new-type guarantee all the same. In domestic China, on the one hand, it is still very obscure about the validity of independent guarantee. On the other hand, it is still empty of laws on it. The rules of the independent guarantee are still department rules and regulations which can't satisfy the requirements of the economic development. Some domestic precedent also refuses the independent guarantee. With China's entry WTO and economic globalization, our domestic economy and international economy are strictly connected. Therefore, we should urgently accept the independent guarantee and perfect the laws of it. At the meantime, we should join the "United Nations Independent Guarantee and Stand-by Letters of Credit" to make it has law to depend on.This thesis consists of four chapters:Chapter 1 is about some basic questions of independent guarantee. It starts from the background and introduces the concept, character and classification of independent guarantee.Chapter 2 is about the analysis of right and obligation. It mainly presents the rights and obligations of each party. There are three parties in the independent guarantee and three contracts among the three parties, which are independent from each other.Chapter 3 is about the fraud exception. The independent guarantee does more good for the beneficiary. However, it does not equal to that the beneficiary will be paid under any circumstances. The chapter will present in which cases the guarantor can executive the deraignment right.Chapter 4 gives some suggestion for the lawmaking of independent guarantee of China. Because there is not perfect law of it, this chapter gives some suggestion of lawmaking of independent guarantee. For example, adding new content to the existed "Guarantee Law", perfect relevant law interpretation and so on.