The Research On Legal Issues Of The Soft Clause Of The Letter Of Credit

Since letter of credit appeared, payment by letter of credit is known as convenient, safe and reliable. With the development and expansion of international trade, the letter of credit is developing with the recognition by the countries’ international trades. It plays an important role on protecting international trade orders and international traders’ legal rights all over the world. However, the emergence of the soft clause has weakened the original function of the letter of credit, brought risks of damaging the beneficiaries’ benefits, reduced the reliability and security, and damaging the valuable influence of the letter of credit’ payment.This thesis researches on related legal issues of soft clause. It is divided into three chapters which starts from the fundamental theory of soft clause to related legal issues of the soft clause.The first chapter discusses the fundamental theory of soft clause including the domestic and overseas’ opinions on its concept, comparison between soft clause’s concept and related concept, the causes and the classification and recognition of soft clause. The first chapter aims to lay a theoretical foundation for later research and analysis. The second chapter specifically analyses the legal nature and effect of soft clause. It starts with different experts’ opinions, then analyses the strengths and weaknesses of their opinions,and finally concludes the author’s opinion on soft clause’s legal nature and effect.The last chapter focuses on discussing how to relief and prevent soft clause. The relief is divided into relief of non-fraudulent and fraudulent soft clause. While the the risk prevention issues is discussed into five parts to be aware of avoiding soft clause and unnecessary risks. All in all, the thesis focuses on the combination between theory and practice, domestic and overseas’ opinions to research on those issues, hoping to make a contribution to further research on soft clause issues.