Unconscionable conduct and the autonomy principle: commercial certainty and transactional risk in documentary credits and demand guarantees

Topic: Unconscionable conduct and the autonomy principle: commercial certainty and transactional risk in documentary credits and demand guarantees

Presenter: Garth Wooler - PhD Candidate, TC Beirne School of Law

Documentary Credits and Demand Guarantees are among the most important trade finance instruments used globally. Trillions of dollars in trade activity are underwritten using these instruments annually, and their strength is underpinned by the Autonomy Principle - a legal element that disengages payment obligations provided by the instrument from any underlying contract between the trading parties. Until relatively recently, the Autonomy Principle was inviolate save for the presence of material fraud. This sacrosanctity has recently come under threat by the recognition within a limited number of jurisdictions that unconscionable behaviour may be seen as a basis for abrogating the Principle. This "Unconscionability Exception" fundamentally contradicts the precepts of party autonomy in international commercial law and potentially introduced heightened levels of risk into trade transactions. 

This research will empirically demonstrate that the unconscionability exception jeopardises the integrity of the Documentary Credit product by introducing unnecessary risk and uncertainty. It will also provide evidence for the view that application of the unconscionability exception must be completely circumscribed. 

All welcome, no RSVP required.

Contact: Beth Williams, ph: (334) 69350, email: events@law.uq.edu.au