letters of credit
A letter of credit is an undertaking, which is irrevocable, by the customer's bank to pay a stated sum of money to the exporter, provided certain specified conditions are met including the receipt of the necessary documentation proving performance of the transaction.

Easyform Glossary of Law Terms. — UK law terms.


letters of credit
Also known as documentary credits. The most frequent form of payment in international trade. A traditional letter of credit is a contract under which a bank agrees to pay the seller, in connection with the export of specific goods, against the presentation of specified documents relating to those goods. The letter of credit is issued at the request of the buyer (who is then referred to as the applicant for the credit) in favour of the seller (the beneficiary of the credit).
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Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • standby letters of credit — Also known as a standby credit, a financial letters of credit or an SLC. Similar to an on demand bond, it enables one party to a contract to obtain payment from the issuer of the standby credit when the other contracting party has failed, or is… …   Law dictionary

  • Back-To-Back Letters Of Credit — Two letters of credit (LCs) used together to help a seller finance the purchase of equipment or services from a subcontractor. With the original LC from the buyer s bank in place, the seller goes to his own bank and has a second LC issued, with… …   Investment dictionary

  • commercial letters of credit — trade related agreement that a certain amount of bank funds is available to an entity. Bloomberg Financial Dictionary …   Financial and business terms

  • Letters of administration — Letter Let ter, n. [OE. lettre, F. lettre, OF. letre, fr. L. littera, litera, a letter; pl., an epistle, a writing, literature, fr. linere, litum, to besmear, to spread or rub over; because one of the earliest modes of writing was by graving the… …   The Collaborative International Dictionary of English

  • Letters of orders — Letter Let ter, n. [OE. lettre, F. lettre, OF. letre, fr. L. littera, litera, a letter; pl., an epistle, a writing, literature, fr. linere, litum, to besmear, to spread or rub over; because one of the earliest modes of writing was by graving the… …   The Collaborative International Dictionary of English

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  • letter of credit — letters of credit 1) N COUNT A letter of credit is a letter written by a bank authorizing another bank of pay someone a sum of money. Letters of credit are often used by importers and exporters. [BUSINESS] 2) N COUNT A letter of credit is a… …   English dictionary

  • Letter of credit — After a contract is concluded between buyer and seller, buyer s bank supplies a letter of credit to seller …   Wikipedia

  • letter of credit — An obligation issued by a bank on behalf of a bank customer to a third party. There are many different kinds of letters of credit. The two most common are commercial letters and standby letters. A commercial or trade letter of credit is a bank… …   Financial and business terms

  • letter of credit — letter of credit: a document issued to a beneficiary at the request of the issuer s customer in which the issuer (as a bank) promises to honor a demand for payment by the beneficiary in order to satisfy or secure the customer s debt compare… …   Law dictionary

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