Strict compliance in Letter of Credit

Letter of Credit (L/C) is a financial and payment contract whose significant character is a bank guarantee and separates the sale or other contracts, although L/C is done so as to perform the obligation of the sale or other contracts.[1]L/C consist the 3 important principal as following:
1. L/C is separate transactions from the sales or other contract
2. L/C concern deal with documents, and not with goods, services and/or other performances to which the document may relate.[2]
3. Banks must strictly comply with L/C.
The aim of this essay is to explain what strict compliance is and how it can be applied to L/C.
Strict Compliance doctrine
Generally, banks must examine all documents stipulate in the Credit with reasonable care and be in compliance with the term moreover, the judgment in United Kingdom has created a fundamental principal of L/C that banks must observe strictly all document.[3] If bank make a payment for the error document, bank will be responsible for it

Relating Link here

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[1] Uniform Customs and Practice for Documentary Credits,2007 Revision,ICC Publication No.600(or called UCP600)Article 4 a.

[2] UCP Article 5

[3] Equitable Trust Co of New York v Dawson Partners (1926) 27 Ll LR 49 at p 52