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Vol 23 No 2 Feb/March 2018

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The UK Supreme Court Yearbook Volume 8: 2016-2017 Legal Year

Edited by: Daniel Clarry
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Standby Letters of Credit in International Trade

ISBN13: 9789041145604
Published: December 2012
Publisher: Kluwer Law International
Country of Publication: The Netherlands
Format: Hardback
Price: £100.00

Low stock.

The question of what constitutes ‘fraud in the transaction’ with respect to international letters of credit varies considerably among jurisdictions.

In proving allegations of fraud, it is crucial for the practitioner to know the relevant jurisdiction’s case law, especially if wider defences such as inducement, unconscionable conduct or bad faith must be invoked. In this book, the author argues that, whereas ‘fraud in the documents’ is generally sufficient in cases involving commercial letters of credit, standby letters of credit demand a wider fraud exception.

The central issue – how wide that fraud exception should be – is what this book explores in depth.This author compares and critically examines the application of the fraud exception in four major trade jurisdictions – the United States, England, Canada, and Australia. With an overall focus on how each jurisdiction’s fraud tests treat the autonomy of standby letters of credit, she builds her arguments on such relevant sources and concepts as the following:

  • when it can be shown that the beneficiary has ‘no bona fide belief’ in the validity of its claim
  • demand guarantees;
  • international initiatives (ICC Rules and the UN Convention on Independent Guarantee and Standby Letters of Credit);
  • the Sztejn Rule;
  • parameters of the ‘fraud in the transaction’ defence
  • ‘materiality’ standard;
  • prerequisites for injunctive relief;
  • arguing ‘fraud in the formation of the contract’;
  • performance bond cases;
  • applying the ‘breach of good faith’ defence;
  • ‘negative stipulation’ in the underlying contract; and
  • equitable versus statutory/broader notion of unconscionability.
The presentation includes detailed summaries and analyses of leading cases in all four jurisdictions.

Lawyers and corporate counsel responsible for arguing claims or defences in letter of credit transactions will welcome the way the author's research and insight define the range of options in each case they handle. Academics also will appreciate the systematic way the book frames a complex area of international trade law.

International Trade, Banking and Finance
About the Author.
List of Abbreviations.

Chapter 1 Introduction.
Chapter 2 Standby Letters of Credit and the Fraud Exception.
Chapter 3 ‘Fraud in the Documents’ and ‘Fraud in the Transaction’: Seeking Conceptual Clarity.
Chapter 4 Application of the ‘Wider’ Fraud Exception to Standby Letters of Credit: The US Position.
Chapter 5 The Fraud Exception: Position under Canadian Law.
Chapter 6 The Fraud Exception under English Law.
Chapter 7 The Fraud Exception and the Principle of Unconscionability: The Australian Law Position.
Chapter 8 Conclusion.

Appendix 1 Uniform Rules for Demand Guarantees
Appendix 2 United Nations Convention on Independent Guarantees and Stand-by
Letters of Credit.
Table of Cases.

Series: International Banking and Finance Law Series

Rethinking Regulation of International Finance: Law, Policy and Institutions ISBN 9789041188380
Published January 2018
Kluwer Law International
Capital Structure and Corporate Governance: The Role of Hybrid Financial Instruments ISBN 9789041148438
Published August 2013
Kluwer Law International
From Crisis to Crisis: The Global Financial System and Regulatory Failure ISBN 9789041133540
Published September 2011
Kluwer Law International
Structured Finance, On from the Credit Crunch: The Road to Recovery ISBN 9789041127877
Published October 2009
Kluwer Law International
International Financial System: Policy and Regulation ISBN 9789041128683
Published January 2009
Kluwer Law International
Securitization Law and Practice: In the Face of the Credit Crunch ISBN 9789041127150
Published August 2008
Kluwer Law International
International Financial System: Policy and Regulation ISBN 9789041127464
Published June 2008
Kluwer Law International
Price on Application
Banking Laws in China ISBN 9789041125194
Published June 2007
Kluwer Law International
International Securities Markets: Insider Trading Law in China ISBN 9789041125576
Published September 2006
Kluwer Law International
United States Securities Law: A Practical Guide 3rd ed ISBN 9789041123626
Published August 2006
Kluwer Law International
Innovation in Securitisation Yearbook 2006 ISBN 9789041125330
Published June 2006
Kluwer Law International
The European Central Bank ISBN 9789041106865
Published May 1997
Kluwer Law International