The Evaluation of Jurisprudential and Legal Functions of the Opening Bank in Documentary Credits

The documentary credit is the most prevalent methods of paying the costs of goods in international trade wherein the payment is done through financial intermediary of the seller’s bank and the buyer. The documenary credit includes three pillars:  applicant, issuing /opening bank, and the beneficiary. The present research aims at studying the roles and commitments of the issuing bank as one of the pillars of credit. Taking features and conditions of the documentary credits into consideration, the contract made is a type of contract whose conclusion is subject to the satisfaction of the three parties, that is, the applicant, the beneficiary, and the issuing bank. However, conclusion of the contract is upon the request of the applicant and the acceptance of the bank issuing the credit. Opening [a letter of] credit, taking deposit from the applicant, examining documentary with regard to the credit, issuing the credit in the beneficiary’s favor, paying the credit  benefit,  and delievering the documents to the applicant and full payment to him upon presentation of the correct documents, all are some of the responsibilities of the issuing bank.Taking these issues into closer consideration, one can obviously see that such committments are not in harmony with the duties of  the offeror /agent in ju’alah . Nonetheless, based on the validity of contracts’ principle and the autonomy of the will, the issuing bank, through a contract, can oblige itself to shoulder some responsibilities whose burden can not be unshouldered since it violates the principle of contract enforcement.