عنوان مقاله [English]
نویسنده [English]چکیده [English]
Letter of credit is a payment method used under the rules of Uniform Customs and Practice for Documentary Credits (UCP). Banks only check the conformity of documents on their face under the Strict Compliance Principle and the Autonomy Principle, paying against the presentation regardless of what happens in the underlying contract. As long as the seller is not acting in good faith, in some cases the Autonomy Principle may unintendedly results in protecting the fraudulent sellers. Thus, it threatens the reliance of the whole documentary credit as a secure payment system that legally protects the buyers against the fraudsters. Considering an exception to the Autonomy Principle known as “Fraud Exception” is the cure found to this problem. The exception entitles the buyers either to restrain sellers from drawing the credit or to restrain banks from making payments to them. The widespread use of documents and the exception led to the origination of an important Rule. Each judicial court argued different interpretation and sometimes in contrast with one another regarding the Fraud Rule, thereby creating an inconsistency in triggering the fraud rule in documentary credits.