• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.22
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• pp.71-106
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• 2004

Todays, L/C transactions in international trade are governed by UCP 500 and eUCP. But UCP 500 and eUCP do not cover all legal problem of L/C transactions. Therefore choice of laws in international L/C transactions are occurred. U.S.A. has an enacted law (UCC ${\S}5-Letter$ of Credit) to govern L/C transaction. But other countries has no special enacted law to govern L/C transaction. The reason is that there are difference between legal attitude of U.S.A. and other countries. American law considers L/C as a special device made by merchants. Therefore U.S.A. applies UCC ${\S}5-Letter$ of Credit instead of general contract law. UCC ${\S}5-Letter$ of Credit includes provisions of warranties, remedies, and so on that UCP 500 and eUCP do not include. But the liabilities of the Issuing Bank on the wrongful dishonor in L/C transaction is very important legal problem. First, this study is to justify concepts of honor and dishonor, and sufficient conditions for dishonor of the issuing bank. in UCC. Second, this study is to examine closely the liabilities of the Issuing Bank on the wrongful dishonor in L/C transaction. Third, this study is suggest distinctive features on the Liabilities to wrongful dishonor of the issuing bank in UCC ${\S}5-Letter$ of Credit and our trader's matters to be attended to L/C transactions governed by UCC.

• Korea Trade Review
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• v.43 no.6
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• pp.25-50
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• 2018

It is an undeniable fact that the counter-guarantees are always exposed to wrongful or fraudulent demands for payment due to its institutional hallmarks and simplicity. Generally counter-guarantees are payable by presenting a written statement indicating that the local guarantor was in receipt of the beneficiary's statement that the principal was in breach of the underlying contract without any proof of any default. No proof of actual payment of guarantee is required. These matters may lead to numerous disputes or conflicts between the parties concerned. These problems raise may legal issues such as a guarantor(or a counter-guarantor)'s dishonor, the wrongful or fraudulent demands for payment, and the fraudulent conspiracy or the acquiescence of the local guarantor in the course of the procedural demand for payment. On the other hand, the guarantor's dishonor or an injunction are sometimes misused as dispute resolution method between parties involved. Therefore, this research analyzed the guarantor's wrongful dishonor and related issues such as an injunction, fraud exception, and others under the counter-guarantee regime focusing on the relevant cases. This paper also suggested practical implications and countermeasures from a business point of view.