LexisNexis ( January 22, 2019, 11:55 AM EST) -- The most important legal principle governing letters of credit is the independence principle. That is what gives the letter of credit its commercial utility. The essence of a letter of credit is that the issuer must honor drafts that comply with the terms of the letter irrespective of any disputes between the applicant and beneficiary regarding the underlying contract between them. The issuing bank deals in documents, not the facts of the underlying transaction that gave rise to the letter. This independence principle is codified at UCC 5-103(d)....