| As an international financial tool, Standby letter of credit has developed for nearly150years. It can be widely used in international economic activities for sticking to the principle ofindependence. So the standby letter of credit has the characteristics of convenience andefficiency in practice, which ensures the international trade and financing guarantee normallyand orderly.Thus, the principle of independence was praised as "the life blood of internationalbusiness". However, because of the standby letter of credit following the principle ofindependence, then the beneficiary may have opportunities to abuse this principle damagingthe legitimate rights and interests of the applicant or the guarantor. In order to seek a balanceof interests, in some cases, the beneficiary’s behavior needs to be limited to a certain extent.So it is very necessary to allow the independence principle to have exception. Fraud exceptionis widely accepted as the exception by the international community, but in this paper, thefocus of the author is not for fraud exception, but for the other two new exceptions—illegalityexception and unconscionability exception. Especially in the field of international financing,international engineering, advances, the illegality exception and the unconscionabilityexception are emerging. Because the illegality exception and unconscionability exception ofstandby letter of credit are rarely studied in our country, in this paper, the author mainlyclarifies such two exceptions. For illegality exception, the author will combine the cases ofcommon law with the relative laws and regulations in United States as well as theinternational conventions to make elaboration. For unconscionability exception, which ismainly based on judicial cases in common law, the author makes an empirical analysis,expecting that the analysis can provide a reference for the study of standby letter of credit inchina.This thesis is divided into three parts: introduction, text, conclusion, the text is dividedinto four parts:The first part is the basic content about the standby letter of credit, including its concept、emergence and development, through comparison with commercial (Documentary) letter ofcredit, obviously there are some legal characters for standby letter of credit.he second part focuses on the principle of independence of standby letter of credit.According to international practice and International Convention for the connotation of background introduction of standby letters of credit, and then analyzes the principle ofindependence’s value in international economic transactions. Secondly, the author willanalyze the fraud exception of independence of the principle, in which recognized standardsof fraud are described.The third part focuses on the analysis of illegality exception of standby letter ofcredit.From the first review, the basic contract will be refused to be payed by the courtinjunction, a justification to standby letter of credit.The author first has carried on the analysisto the case, the application of basic conditions and exceptions as well as the applicable scopeof illegality exception; then, according to the fifth articles of "Uniform Commercial Code" inthe United States of the America, it provides opportunities for the illegality exception, whichmay become the basis of a non-fraud to break the principle of independence in the UnitedStates; finally, the author explains the contract law is applicable to problems in the judicialpractice of the United Nations Convention on independent guarantees and standby letters ofcredit terms.The fourth part mainly discusses the unconscionability exception of the standby letterof credit. From analysis of judicial cases in the UK, Singapore, Australia and other countries,the author clarifies the unconscionability exception including the case introduction, the focusof the case dispute as well as the court’s judgment.Through the analysis of a series of cases,the author makes conclusion of concepts and standards for unconscionability exception. |
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