Letter of Credit Law

A Letter of Credit (LoC) is a financial document used in international trade that guarantees payment from a buyer's bank to a seller's bank, provided certain conditions are met. It's a way to reduce risk for both the buyer and seller. The buyer pays the bank to issue the LoC, and the seller gets assurance of payment upon fulfilling the terms, like delivering goods. The law governing Letters of Credit ensures their proper use and outlines the obligations and rights of all parties involved, promoting trust and stability in trade transactions.