Fraud, Letters of Credit, and the Uniform Commercial Code: It is Time to Untether the Independence Principle

Abstract

The purpose of this Article is to evaluate the efficacy of the fraud exception to the independence principle in letters of credit law in the case of both commercial and standby letters of credit. In doing so, a primary focus will be to identify which of the various parties to a letter of credit transaction the present fraud exception protects and to evaluate the policy justifications for why these persons are viewed by the law to be eligible recipients of protection