Nullities in Letters of Credit: Extending the Fraud Exception

Reflects on whether the nullity exception in letters of credit should be extended to cover all fraudulently created documents, not merely those in which the beneficiary was aware of the fraud. Reviews the current operation of the fraud exception to the autonomy principle governing letters of credit, the need for beneficiaries to know of the fraud when a document is presented, and the position where a beneficiary innocently creates a null document. Details the arguments for and against extending the exception, and why financial institutions and international trade will benefit from doing so.