Beyond The American Accord: making the way for illegality in letters of credit

This article addresses the illegality exception in commercial letters of credit. It examines the UK court decisions that have thus far developed the exception and critically analyses the requirements needed to establish it. It discusses policy considerations for recognising the exception and the effect of its recognition on international trade in general. It argues that flexibility in the autonomy principle is necessary to maintain letters of credit as the lifeblood of international commerce and that for the exception to have any real effect it must not be overly restrictive.