The Legal Nature of Documentary Transactions from a Judicial Procedure Perspective

Since the parties of the bank guarantee and documentary credit act only on the basis of documents, they are called documentary transactions. Recognizing the legal nature of these transactions is important because of the fact that if these two legal entities (documentary credit and bank guarantee) are of a contractual nature, the recognition of their elements are based on general rules and principles of contract law and if they are to be identified as (a) nominate/specific contract (namely the contracts which their rules and conditions are prescribed in law), they have the capability of completion and resolution of disputes only pursuant to the applicable provisions of such nominate/specific contract.  Lawyers have variety of opinions in this respect and there is no consensus on the nature of the bank guarantee in judicial proceeding. The examination of cases involving documentary credits also shows that the courts do not discuss the nature of the documentary credit agreement and merely cast a vote by referring to article 10 of the civil code, that is, the documentary credit validity is accepted under article 10.