Letter Of Credit Negotiation Related Legal Issues

Letter of Credit(L/C) is one of the most important payments of international trade, and negotiable L/C is a familiar one. But the negotiation of L/C is one of the controversial issues of the L/C businesses. Although UCP600 brings in the Theory of Purchase,and settles down some controversies to a great extent, the ICC slides over the legal problem in the link of negotiation,there still exist some controversies over negotiation. In the practices, banks in china often choose to conduct Outward Bill rather than real negotiation, in the purpose of their own self-interest. It will made the bank beside the L/C business, which will lose the international competitiveness finally. This essay seeks to make a systematic analysis on the subject.This dissertation is divided into four chapters,which mainly include the following:Chapter One introduces the evolution of the definition of negotiation in UCP in detail,and discusses the definition of negotiation in theory and practice.Chapter Two analyses the legal constitutive elements of negotiation with cases in detail.Chapter Three discusses the differences between negotiation and Outward Bill, distinguishes them clearly.Chapter Four discusses the key controversies of the negotiation—the right of recourse, and try to find the legal basis according to the different situations in current legal systems.