A Case Study on Complying Requirements of the Description of the Goods in Documentary Credit Transactions

화환신용장거래에서 물품명세의 일치성요건에 관한 사례연구

Documentary credit transactions are judged by the principle of strict compliance. The compliance of the tendered documents with the credit's teams ensures the proper completion of the underlying transaction. But if the documents tendered by beneficiary differ, a discrepancy of documents occurs. Such a discrepancy raises difficult problems for the bank to which the documents are tendered. It has to decide whether to reject or accept them or to accept them under a protective mechanism. Therefore, this study is to examine the case study of complying presentation of the description of the goods in documentary credit through the Korean Supreme Court Cases. The objectives of this paper are as follow : 1. To examine two point of views on document compliance such as strict compliance and substantial compliance. 2. To analyze Korean Case Law which challenges the legal conclusions, standard for examination of documents and New ISBP. 3. To draw out the criterion for conformity and discrepancy of description in invoices and WC and to provide the guidelines for determining the nature and extent of an issuing bank's duty of documentary compliance. 4. Finally to suggest some implications through the Korean case law. By using the examination standards for description of goods suggested in Korean Case Law and New ISBP, the traders will be able to prepare documentation more perfectly and document checkers will be able to examine the negotiation documents more easily.