Jump to Content Jump to Main Navigation

Part IV International Business Law, XXV Letters of Credit

From: Principles of International Economic Law (2nd Edition)

Matthias Herdegen

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 01 June 2023

Corporations — International investment law — International monetary law — Goods

This chapter provides a brief overview of ‘letters of credit’, which play an important role in international sales as an instrument for payment in international documentary sales. They establish an undertaking of a bank acting on behalf of the buyer or the seller. The chapter describes two forms. The ‘documentary credit’ guarantees fulfilment of the seller’s claim of payment upon presentation of certain documents, which may include commercial invoices, bills of lading, certificates of quality, or other papers. The ‘standby letter of credit’ secures the obligation of the seller to perform the sales contract for the benefit of the buyer. It constitutes a commitment by the seller’s bank that must be honoured upon submission of a pro forma declaration by the buyer that the seller has not complied with their contractual obligations.

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.