Legal Research On Letter Of Credit Trade Principle

Letter of Credit (abbreviated as L/C) is the most important form of payment in international trade transaction. By means of L/C, the business credit is substituted by the credit of bank for the purpose of facilitating trade, which greatly reduces the risk of the exporter and ease the trust crisis. In the thesis, I fully analyze the L/C trade principle, make comparison among international practice , the legislation and judicial practice in western developed countries and the legislation and judicial practice in China, afterwards I make proposal on how to improve Chinese current related legislation, by reference to the good practice in developed countries and international practice .The thesis includes 4 chapters:First chapter is about the definition of L/C and the basic theory regarding L/C trade. Firstly, I briefly make definition of L/C basic trade and the related law relation; afterwards, make explanation of L/C and L/C trade and introduce the different parties in L/C as well as the operation process; then introduce the relationship between L/C and the L/C basic trade; finally, research on law application from the aspect of domestic law in developed countries, international convention and practice and Chinese domestic law.Second chapter is about the application and exclusion of the principle on abmraction of credit. The most basic principle of L/C system is the principle of abmraction of credit , which is of great significance. In this chapter, I introduce the definition and the basic theory of this principle, the exception of this principle as well as the advantages and disadvantages of this principle. Meanwhile, I also introduce the definition, necessity and application condition of another important principle—Strict Compliance.The third chapter is about the application and exclusion of the principle of fraud exception. This principle has become the hot point of L/C. With the entrance of WTO, China has become the third biggest trade country in the world. Due to lack of experience and expert, Chinese people always suffer from the trade fraud and the research on this has become important. In this chapter, firstly, I analyze the definition and theoretical foundation of this principle and make further explanation by means ofcase study; Afterwards, I summarized the experience of American law system; finally, I make research on the relationship between the principle of abmraction of credit and the principle of fraud exception.The fourth chapter is about how to improve Chinese L/C related law system. I mainly introduce the L/C related regulation in Chinese law system, and make applicable proposal on how to make improvement on Chinese law system from the aspect of domestic law and judicial practice and international regulations.