Letters of credit are commonly used in business transactions to ensure payments, especially, when the parties reside in different locations. While the determination of the law governing the letter of credit is very important for the parties, in many cases, it is ignored by the parties, and it is not mentioned in their contract. The silence of the parties leaves the duty for the courts to determine what law should govern the letter of credit agreement. This article examines and evaluates each of the contractual relationships between the parties of the letter of credit, and the law governing each legal relationship is examined independently and separately so that due to the independence of the legal relationships of the multiple parties of the letter of credit, the law governing each One of the contractual obligations should be determined precisely.In this regard, after reviewing relevant international regulations, including the Rome I Regulation and the Uniform American Trade Act, Iran's legal position is examined. The main question of the article is which law governs the contractual relations of the letter of credit parties? In line with the procedures and developments governing international trade law and international contracts , it is suggested that Iran's legislator, in line with the laws of other countries , move towards accepting the principle of the sovereignty of the will, and Article 968 of the Civil Code, which is currently is not in line with the requirements of trade law,  The international and broad global trends regarding the acceptance of the principle of the rule of will should be adjusted in line with Article 27 of the International Commercial Arbitration Act and to move in the direction of influencing the will of the parties and the effectiveness of international contracts. This article concludes that in the absence of uniform provisions of letters of credit as the governing rules of letters of credit and if the credit does not have a choice of governing law, the governing law is the legal system that has the closest and most real relationship with the credit. In the relationship between The law of the applicant and the credit opening bank , the closest connection is to the law of the country where the credit opening bank is located. In the case of the beneficiary and the notifying bank, the closest connection is to the law of the country where the notifying bank operates.