On Domestic Application Of Independent Guarantees In China

Independent guarantee is a guarantee applied in international commercial activities. Independence is different from the traditional guarantee. Independent guarantee is independent from fundamental contract and simplifies trade, therefore is widely used in economy and trade. However, independence increase risks to the parties of transaction. In our country, many companies use independent guarantee in domestic trade, but we lack related domestic laws. The basic problem of independent guarantee is whether recognize domestic application of independent guarantees in our country. The problem is controversial and causes unnecessary confusion in the judicial trial. This article analyses and draws a conclusion about whether recognize domestic application of independent guarantees in our country through theoretical study, comparative research, case analysis, analysis of the present situation of our country.This paper mainly includes four parts.The first part is an overview of independent guarantee. Summarized domestic and overseas theory research about defining the concept and characteristics of independent guarantee. Then by the introduction of independent guarantee function we can conclude the value of its existence and possibility for the following content.The second part is introduction and analysis different viewpoints through the cases. Opponents say there is that no law recognizes domestic application of independent guarantees in China, and the independence will cause a lot of problems, which would undermine the position of the dependency in Security Law. What’s more, independence guarantees can lead to more fraud and abuse. Supporters argue that the legislation has given space for domestic application of independent guarantees. Independence guarantee will not shake the foundation of Security Law. On the contrary, it can greatly improve the efficiency of business and adapt to economic development. The author will analyze the viewpoints and come to a preliminary conclusion.The third part is the investigation that how the other countries provide domestic application of independent guarantees in their countries. These countries have the law of independent guarantee, but at first they also had questions. Here the author applies their domestic laws then analyze the legislative process and considerations, in order to serve a reference for our country.The fourth part is the conclusion and suggestion. Domestic application of independent guarantees in China has the basis of theoretical and practical, and adapts to economic development. So this should apply to the domestic trade of our country. Independent guarantee as a new guarantee, its hidden risks of the domestic application bound to some problems. In view of the problems in other countries, the author put forward some suggestions for ensuring the domestic application of independent guarantee going smoothly in China.The innovation of article is that there are a little research of independent guarantee in our country, but lack of the research of domestic application of this. In late2013,the Supreme Court issued 《the Rules of the Supreme People’s Court concerning Several Issues in Adjudicating Letter of Credit Cases》 which also did not give specific provision to this question, it enumerates the two different viewpoints, so the problem is still controversial and should be discussed.