Page:Harvard Law Review Volume 32.djvu/40

6 6 HARVARD LAW REVIEW reimbursed.® Accordingly, as between the issuer of the letter and the correspondent the letter of credit is a mandate. It is a mandate to the correspondent to pay to or give credit to the holder; the correspondent becoming thus entitled to be reimbursed by the issuer of the letter. But the correspondent is not obliged to pay or to give credit. He simply acquires a claim against the issuer by doing so. Hence, as between the issuer of the letter and the corre- spondent it is revocable down to the time the correspondent acts on it,^*' like any mandate.^^ On the other hand, as between the issuer of the letter and the holder the transaction is treated as one of "opening of a credit" (ouverture de credit) and hence is not rev- ocable.^^ It is taken to show an opening of a credit between the one who gives the letter of credit and the one for whom it is given. ^' This requires some explanation. In continental banking, the bor- rower from a bank arranges for a credit on which he can draw. In other words, as we should put it, he overdraws to the amount agreed upon.^* There is not a loan, as in our practice, but an agree- ment to loan up to a certain amount within a certain time. As the civilians put it, there is not a mutuum but a pactum de mutuo dando}^ This doctrine is a result of the modern idea of the bind- ing force of a promise made as a business transaction ^^ and of the equally modern notion of the power of the promises to exact specific performance.^^ Accordingly the promise to make a loan, which in Roman law was unenforceable, as a mere pact, unless made in the form of a stipulation, in the modern law is a binding transaction.^^ Gliick says of the pactum de mutuo dando: » Inst. Ill, 26; Pothter, Trait£ du Contrat de Mandat, § i. " 4 Lyon-Caen et Renault, § 738. 1* French Civil Code, Art. 1984. 12 4 Lyon-Caen et Renault, § 739. i» Id., § 736. " 4 Lyon-Caen et Renault, § 709 /. On this subject, see Falloise, Trait£ de l'Ouverture de Credit. ^* A good account of this in English may be seen in Lee, Roman-Dutch Law, 197- 99. ^' Ouverture de credit or protnesse de prU, 2 Colin et Capitant, Droit Civil Franqais, 662; 2 Baudry-Lacantinerie, Precis de Droit Civil, 10 ed., § 1576; 20 Baudry-Lacantinerie, Trait£ de Droit Civil, § 700; Promessa di mutuo, 2 Chironi, Istituzioni di Diritto Civile Italiano, § 354; Krediteroffnung, Darle- hensvorvertrag, Darlehensversprechung, 2 Dernburg, BtJRGERUCHE Recht, 3 ed.,
 * 4 Lyon-Caen et Renault, §§ 684, 709.
 * ^ See Amos, "Specific Performance in French Law," 17 L. Quart. Rev. 372.