Shipping Guarantees Legal System

The letter of indemnity came into being for the request of the trade. It accelerates the circulation of funds and goods and effectively lysises the beneficial conflicts among the carriers, shippers and consignees. So it's called "lube of the trade and shipping". The L/I tries to lysis the encumbrance of trade due to the inflexible rules, but it endangers the base of these rules. It not only ruins the credibility of B/Ls, but also supplies convenience to the fraud in the shipping. So from the moment it coming into being, it has been connected to fraud and its force has been under suspicion. It brings disadvantage influence to the credibility of B/Ls and normal order of trade and shipping. Though academe has been discussing the effectiveness of the L/l for years, many countries & international organizations have tried to regulate it, due to its proper limitation, there is no material progress in legislation. Now the L/l is in the awkward circumstances.So this article begins with the discussion of the legal character of the L/l, then definitudes the legal effectiveness of it. At last, it use the independent guarantee system for reference to set up the new system of L/ls to get the L/l away from the basic legal relationship. The writer hopes to provide a possible approach to the legislation of L/ls.The first chapter introduces the production of L/ls, the characteristics of common L/ls, basic content of L/ls and the actuality of legislation. The second chapter is about the legal character of L/ls. The writer classifies the L/l into two sorts, the first is the L/ls provided by cargo interests and the second is provided by the third party. After analysing the contents of the two, we come to the conclusion that the first sort belongs to conditional compensation contract and the second belongs to guarantees. The third chapter is about the legal effectiveness of L/ls. The writer first introduces the actuality of legislation, including that in Britian, US, France, China and the Hague Rules, the Hague/Visby Rules & the Hamburger Rules. Then it discusses the legal effectiveness of L/l. For the first sort of L/I, it analyses them by five legal rules, including the content, principals, declaration of will, object and form of the contract. It put emphases on the content, discussing in legality and appropriation. For the second sort of L/l, it starts from the debt guaranteed by the L/l. Compared with the composing factors of debt, we can conclude it into debt of ill-gotten gains. Due to the subordination of guarantee, L/ls for anti-date B/L or advanced B/L are always of no effect because the behavior of signing this kind of B/Ls are fraud. But the effect of L/ls to be given in return for delivering cargo without presentation of B/L or for clean B/L is not so definite. They have comparable effect. When the carriers and shippers have disputes on the condition of the cargo, the behavior of signing a clean B/L is not fraud, so the L/ls are in effect. Delivering cargo without presentation of B/L in good faith or not composing fraud will also not make the L/ls be of no effect. By the analysis hereinbefore, we know that the effect of L/ls are often influenced by the basic legal relationship. From 1960s, L/ls have become more and more independent and a new kind of independent guarantee has come into being. In the fourth chapter the writer uses the independent guarantee system for reference to set up a new system of L/ls to get the L/l away from the basic legal relationship and has its independent effect.