Research On The Basic Legal Relationship Of Letter Of Credit

As the most important payment instrument and financing method,the letter of credit plays an important role in international commercial transactions.In the whole L/C business process,there are many links,usually involving many parties,but the most basic and important is the applicant,the beneficiary and the issuing bank.The basic legal relationship of L/C is the three parties,three transactions,namely:the legal relationship between the issuing bank and the beneficiary,the issuing bank and the applicant,and the applicant and the beneficiary.There are many disputes on the legal relationship between the issuing bank and the beneficiary,the issuing bank and the applicant.The settlement of these disputes is very crucial to settle transaction and disputes.At present,China's legislation on L/C is only the judicial interpretation disputes cases issued by the Supreme Law in 2005.The court mostly cites UCP600 in the trial of cases.Compared with the frequent use of L/C and the constant emergence of dispute cases,it is obvious that the current legal norms are far from enough.On the basis of comprehensive analysis and understanding of L/C,this paper analyzes the relevant theories put forward by the academic circles.The purpose is to make a detailed division about the legal relationship between the issuing bank and the beneficiary,the issuing bank and the applicant.Firstly,on the basis of the existing theories and Chinese civil law,the legal relationship between the issuing bank and the beneficiary is an independent payment guarantee theory.The case where the beneficiary requests the issuing bank to fulfill the payment responsibility is selected for further analysis and demonstration.Secondly,it puts forward to the theory that the relationship between the issuing bank and the applicant is an entrusted contract.In view of the theory circle,it is more defined as a contract of agency,and two typical cases are selected for comprehensive analysis of the same issue.Finally,the relationship between the applicant and the beneficiary of the L/C is further positioned in the international sales contract and in order to clarify the rights and obligations.Through the analysis of theory and case,we can improve the practicality of the article.On the other hand,we can get the utility of clear legal relationships for handling cases.It is helpful to sort out the relevant laws and solve practical problems more efficiently.