This is one of the frequently asked WCF Interview Questions and Answers. Common language runtime (CLR) exceptions do not flow across service boundaries. At the maximum, a CLR exception may propagate up to the service tier from business components. Unhandled CLR exceptions reach the service channel and are serialized as SOAP faults before reporting to clients. An unhandled CLR exception will fault the service channel, taking any existing sessions with it. That is why it is very important to convert the CLR exceptions into SOAP faults. Where possible, throw fault exceptions

SOAP faults are standards-based and interoperable. There are 2 formats used by SOAP faults, SOAP 1.1 and SOAP 1.2. SOAP format depends on the binding used.