Letters of Credit and Demand Guarantees Defences to Payment

This book is the first to provide an extensive analysis of the range of defences to payment under letters of credit and demand guarantees. It considers the extent to which different defences undermine the abstraction of these instruments. This is a fundamental issue, since letters of credit and demand guarantees are designed to be abstract, or autonomous, from the underlying contract that called for their use. The purpose of that abstraction is to provide certainty of payment, but the various defences diminish that certainty. The book examines the spectrum of defences that are frequently litigated and debated in international practice: fraud in the documents, nullity, fraud affecting deferred payment letters of credit, fraud as no honest belief, unconscionable conduct and illegality. Vitally, the book provides analysis of the relevant judicial decisions and offers clear practical guidance on which defences are most suitable for each instrument. As the instruments are heavily used in international trade, this work is particularly suited to financial and commercial law practitioners who draft agreements, as well as those who advise on disputes concerning these instruments. Accessible and engaging, the book is also relevant for academics and students.

Dr. Deborah Horowitz graduated with BA (Hons) and LLB (Hons) degrees from the University of Melbourne, and then practiced as a solicitor at Mallesons Stephen Jaques in Melbourne, specializing in banking and finance disputes. In 2005, she commenced studies at the University of Oxford, where she read for the degrees of BCL (Dist), MPhil (Dist) and DPhil. She is currently practicing as an associate in the Dispute Resolution Group at Freshfields Bruckhaus Deringer LLP in London, where she works on financial, commercial and regulatory disputes.