The UNCITRAL Draft Convention on Independent Guarantees and Standby Letters of Credit

Article Abstract:

The United Nations Commission on International Trade Law (UNCITRAL) Draft Convention on Independent Guarantees and Standby Letters of Credit proposes to revise the treatment of independent guarantees in international trade. The independence provisions limit the Convention's applicability to those cases when the guarantee agreement does not incorporate the terms of the underlying contract. The Convention allows non-documentary payment conditions to be disregarded for letters of credit. The fraud exceptions to payment are contained in the improper demand provisions.

Letters of credit, international

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Lenders and independent solicitors' certificates for guarantors and borrowers: risk minimization or loss sharing?

Article Abstract:

Independent advice from solicitors is not necessary for all loan and guaranty transactions, but it is appropriate in instances where subsequent unfairness issues appear more likely. To minimize the tendency for certified letters to be used as a form of risk-sharing between lenders and solicitors, the letters prepared by solicitors should be well-drafted and thoroughly investigated. Independent advice has proved more persuasive to courts than information generated by lenders and guarantors.

United Kingdom, Australia, Loans, Letters of comfort, Comfort letters

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Automatic crystallization of floating charges - catching a disposition which triggers the crystallization

Article Abstract:

Fire Nymph Products Pty v Heating Centre Pty resulted in a decision supporting automatic crystallization for a floating charge when creditors take on stock from a debtor company. The case indicates that a crystallizing event should be created as an action outside of usual business. The case indicates that one who takes the stocks of a debtor company also takes on the crystallized charge.

Cases, Debtor and creditor, Floating charges

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