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(2) Definition of Documentary Credit
Documentary credit is a written promise by the issuing bank to the beneficiary, under which the bank will pay a certain sum to the beneficiary of the L/C provides the bank with specific documents within a prescribed period, which all comply with the terms and conditions of the credit. After entering into a sales contract agreeing to on payment by a documentary credit, the buyer (applicant) can apply to its bank (issuing bank), usually in its own country, to issue a documentary credit naming the seller as beneficiary and arranges for security for opening the credit, then the issuing bank can open a documentary credit on the instruction of the applicant and send it to the advising bank named to inform the beneficiary. When the shipment are made and the seller collects all the required documents stipulated in the credit such as bill of lading, insurance documents and commercial invoice, the seller can approach the local advising bank with documents conform to the credit stipulation for the payment. At last the advising bank can present the documents to the issuing bank for reimbursement. After examining the conformity of the documents, the issuing bank will then debit the buyer’s account and credit the advising bank’s account. A properly functioning letter of credit thus ensures that neither the buyer nor the seller has both goods and cash at the same time. 
The use of documentary credit is subject to the Uniform Customs and Practice for Documentary Credits (UCP), 2007 Revision, ICC Publication NO. 600 when the text of the credit expressly indicates that it is subject to these rules . Article 2 of UCP 600 defines a credit as following: 
Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation.

2.2 Autonomy Principle of Documentary Credits

(1) Autonomy Principle
Provided the documents are presented, as long as they are in compliance with the requirements of the credits, it is the issuing bank’s responsibility to make the payment no matter whether the goods are actually delivered or not. That is, the parties get involved in the credit deals with documents only, not the goods. And the financial transaction between banks and other partied is independent from the sales contract signed by the buyer and seller. This characteristic of documentary credit is known as the principle of autonomy.
The Article 4 of ICC UCP 600 writes: 
A credit, by its nature is a separate transaction from the sale or other contract on which it may be based. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit. Consequently, the undertaking of a bank to honor, to negotiate or to fulfill any other obligation under the credit is not subject to claims or defenses by the applicant resulting from its relationship with the issuing bank or the beneficiary.
The Article 5 of ICC UCP 600 provides: “bank deals with documents and not with goods, services or performance to which the documents may relate.” 
The consequence of this principle is that the performance of the underlying transaction is irrelevant to the payment of the credit. 

(2) The Importance of Autonomy Principle
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