Obviously Unfair Independence Principle Exception Research As The L/c

The principle of independence is the backbone of letters of credit, theexception to which must be limited strictly. The widely accepted exceptionto this principle is the fraud exception. However Australia has an additionalexception which is widely criticized internationally. The exception is theapplication of Part IVA of the Trade Practices Act dealing withUnconscionable Conduct. Subsequent cases in Singapore and Malaysianreplicate the underlying Australian principle without the legislativeplatform. The theme of this thesis is to analyze whether this new exceptionto principle of independence is appropriate and whether it can be applied inChina. The thesis is divided into four parts.Chapter one is a general introduction of the principle of independenceand its exceptions. The principle of independence is the backbone of lettersof credits, which is critical to the certainty and promptness of payment. Inthis chapter, the author introduces the significance of principle ofindependence and the exceptions, which include the fraud exception, theillegality exception, the abuse of right exception and the unconscionabilityexception.Chapter two is an introduction of the unconscionability exceptioncases in foreign countries and an analysis on the cases. Theunconscionability exception to the independence principle is becomingsomewhat entrenched in Australia, Singapore and Malaysia. This chapteranalyzes the relevant cases in those countries and concludes theunconscionability exception jeopardizes the integrity of the letters of creditproduct.In Chapter three, we focus on analyzing the possibility of replicatingthe unconscionability exception into China. Additionally, we put forwardsome suggestions to improve the principle of independence and itsexceptions in China. The author analyzes the legal basis, relief and effect ofthe unconscionability exception and comes into a conclusion that it isinappropriate for China to replicate this exception. In the end, the author summarizes her views in this thesis and comestoa conclusion.