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1、http:/ 留学生论文专业定制代写网站留学生Essay写作平衡各方权利和义务IntroductionThe letter of credit is the most commonly used method of payment for goods in international trade.This thesis highlights the imbalance of the rights and duties of the parties in a letter of credit transaction by emphasising deficiencies in the lette
2、rs of credit system.In addition,on those areas where there is lack of justice and equity and which make the system of the letters of credit vulnerable for fraudulent activities.After briefly discussing the structure of the letter of credit system,it discusses the rights and duties of parties to such
3、 transactions and how the risk of the innocent buyer has increased under UCP and very often the buyer is paying for the goods he had not contracted for.It further discusses the independence principle and the doctrine of documentary compliance,that overprotection of the“independence principle”,and th
4、e lack of “reasonable care”on the part of banks provide opportunities of fraud to the sellers to obtain payment without actually performing their duties to banks and buyers.It will also argues about the“fraud exception”to the independence principle,particularly the position of the fraud exception in
5、 England and the history of some decisions of English Courts. In the end it gives some suggestions to balance the rights and duties amongst parties in a letter of credit transaction.Chapter 1Structure of a Letter of Credit TransactionCommercial letters of credit have been used for the centuries as a
6、 most common method of payment,in international trade.Letters of credit used in international transactions are governed by the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits(UCP).A commercial letter of credit is a contractual agreement between a bank(issuing b
7、ank),on behalf of one of its customers(buyer),authorizing another bank(advising or confirming bank),to make payment to the beneficiary(seller).The issuing bank,on the application of its customer (buyer),opens the letter of credit,and makes a commitment with the buyer to honour the credit on the pres
8、entation of the documents,conforming to the terms and conditions of the credit,by the beneficiary.Thus,the issuing bank replaces the banks customer as the payee.Elements of a Letter of CreditA payment undertaking given by a bank(issuing bank)On behalf of a buyer(applicant)To pay a seller(beneficiary
9、)for a given amount of moneyOn presentation of specified documents representing the supply of goodsWithin specified time limitsDocuments must conform to terms and conditions set out in the letter of creditDocuments to be presented at a specified placeBeneficiary Beneficiary is normally the provider
10、of the goods or services and is entitled to payment as long as he can provide the conforming documents required by the letter of credit.The letter of credit is a distinct and separate transaction from the underlying contract(contract between seller and buyer).All parties deal in documents and not in
11、 goods. The issuing bank is not liable for performance of the underlying contract between the buyer and seller.The issuing banks obligation to the buyer- applicant is to examine all documents to insure that they are in compliance with the terms and conditions of the credit.To get the payment it is f
12、or the beneficiary to provide all the required documents.If the seller- beneficiary conforms to the letter of credit,the seller must be paid by the bank.Issuing BankThe issuing banks duty to pay and to be reimbursed from its customer becomes absolute upon the completion of the terms and conditions o
13、f the letter of credit.Under the provisions of the Uniform Customs and Practice for Documentary Credits,the bank is entitled to have a reasonable time after receipt of the documents to honour the draft.The issuing banks duty is to provide a guarantee to the seller that if complying documents are pre
14、sented by the seller,then the bank will make the payment to the seller,and will only pay if these documents comply with the terms and conditions set out in the letter of credit.Typically the documents requested include a commercial invoice,bill of lading or airway bill and an insurance document;but
15、there are many others.Letters of credit only concerns with the documents,not with the goods.Advising BankAn advising bank is usually a foreign correspondent bank of the issuing bank which advises the seller-beneficiary.Generally,the beneficiary wants to use a local bank to insure that the letter of
16、credit is valid.In addition,the advising bank is responsible for sending the documents to the issuing bank.The advising bank has no other obligation under the letter of credit.Therefore,if the issuing bank does not pay the beneficiary,the advising bank is not obligated to pay.Confirming BankAt the request of the issuing bank,the correspondent bank may confirm the letter of credit for the
