Online Encyclopedia

LETTER OF CREDIT

Online Encyclopedia
Originally appearing in Volume V16, Page 501 of the 1911 Encyclopedia Britannica.
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LETTER OF CREDIT, a letter, open or sealed, from a banker or merchant, containing a request to some other person or firm to advance the bearer of the letter, or some other person named therein, upon the credit of the writer a particular or an unlimited sum of money. A letter of credit is either general or special. It is general when addressed to merchants or other persons ingeneral, requesting an advance to a third person, and special when addressed to a particular person by name requesting him to make such an advance. A letter of credit is not a negotiable instrument. When a letter of credit is given for the purchase of goods, the letter of credit usually states the particulars of the merchandise against which bills are to be drawn, and shipping documents (bills of lading, invoices, insurance policies) are usually attached to the draft for acceptance.
End of Article: LETTER OF CREDIT
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Additional information and Comments

Payment realised against the Letter of Credit can be transfered to the account of the Manufacturer exporer on the instructions of the beneficiary of the Letter Of Credit
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