Tethering the Fraud Inquiry in Letter of Credit Law

  title={Tethering the Fraud Inquiry in Letter of Credit Law},
  author={John F. Dolan},
The law of abstract payment undertakings fashions a rule that the undertakings are, as their name implies, independent of the transactions out of which they arise. That independence principle admits of an important exception if the beneficiary of the undertaking fraudulently seeks payment when he has no colorable right to payment. The parameters of the fraud exception to the abstraction principle are of necessity imprecise. Although courts have developed a number of limits to the exception… CONTINUE READING