THE PROBLEM OF COMPLIANCE UNDER LETTERS OF CREDIT IN LIGHT OF THE LEGAL DOCTRINES

Abstract

This paper studies whether the compliance is present or not under the documentary letters of credit, in respect of the fact whether the doctrine of strict or substantial compliance is applied. Compliance means the congruence of the documents delivered by the beneficiary to the terms of the letters of credit. The first part of the paper analyses characteristics of the doctrines of strict and substantial compliance, as well as theirs view of the compliance. In this respect the author concludes about theirs diversity, which is reflected to the standard of compliance. The second part of the article deals with different sources of Law and theirs perspective to the doctrines of compliance. In light of aforementioned, the author concludes which of the doctrines is preferred. The third part of the article deals with jurisprudence of the United States of America, as the most prominent representative of the common law countries in respect of the preferred doctrine. Finally, the last part of the article researches the banks liability under the doctrine of strict or substantial compliance.