Research On The Fraud Exception Principle Of Letters Of Credit

Letters of credit(L/C) is one of the most important methods of payment. Howver, L/C uphold the principles of independence, making it separated from the transaction contract, but at the same time gave L/C fraud to create the conditions, which damage to the system of L/C. Therefore, in order to provide a letter of credit fraud civil remedies, the world gradually established the principle of fraud exception. China has many judicial precedents in this area, but still has lots of deficiencies in application. Thereforce, we shall learn from the successful experience of a sound legal system common law countries in legislation and judicial practice, combined with China’s national conditions to improve the legal system of China’s creditsystem.This paper consists of four chapters discusse the principle of fraud exception. Article one discusses the princple of fraud exception, including the concept,theoretical basis and reasons of the princple of fraud exception. Article two focuses on the common law and civil law countries how to apply the principle of fraud exception. The third chaper discusses the problems we are facing in legislation and judicial practices. Article four puts forward some recommendations how to solve these problems.