Letter of Credit definition: Copy, customize, and use instantly
Introduction
The term "Letter of Credit" refers to a financial instrument issued by a bank or financial institution guaranteeing payment on behalf of a buyer to a seller, provided the seller meets specific terms and conditions outlined in the letter. It is essential for securing transactions in international trade, ensuring that payments will be made in accordance with the terms agreed upon by both parties.
Below are various examples of how "Letter of Credit" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Letter of Credit" as a financial guarantee
This definition ties "Letter of Credit" to its role in guaranteeing payment in a transaction.
"Letter of Credit" means a written document issued by a bank or financial institution confirming the availability of funds to a seller upon fulfilling specified conditions set forth in the agreement.
Definition of "Letter of Credit" as a payment mechanism
This definition connects "Letter of Credit" to its function in ensuring payment security.
"Letter of Credit" refers to a payment mechanism whereby a bank or financial institution provides a guarantee of payment to a seller when the buyer meets certain conditions stipulated in the agreement.
Definition of "Letter of Credit" as a trade finance tool
This definition links "Letter of Credit" to its use in facilitating international trade transactions.
"Letter of Credit" means a financial instrument used in international trade, issued by a bank, that ensures the seller receives payment for goods or services as long as the conditions are met.
Definition of "Letter of Credit" as a documentary credit
This definition applies "Letter of Credit" to its role as a documentary credit in a trade agreement.
"Letter of Credit" refers to a document issued by a bank guaranteeing payment to a seller, contingent upon the seller’s compliance with the terms outlined in the credit, including the submission of necessary documents.
Definition of "Letter of Credit" as a Payment Method
This definition ties "Letter of Credit" to its role in financial transactions.
"Letter of Credit" means a written commitment from a bank, guaranteeing that a seller will receive payment for goods or services, provided certain conditions are met.
Definition of "Letter of Credit" as a Trade Finance Instrument
This definition connects "Letter of Credit" to its use in international trade.
"Letter of Credit" refers to a document issued by a financial institution that assures payment to the seller upon the presentation of specified documents, ensuring the buyer's financial security.
Definition of "Letter of Credit" as a Financial Security Tool
This definition links "Letter of Credit" to its role as a security for payment.
"Letter of Credit" means a financial instrument that ensures a seller receives payment from a buyer, often used in international trade to mitigate risks of non-payment.
Definition of "Letter of Credit" as a Contractual Requirement
This definition applies "Letter of Credit" to contractual agreements.
"Letter of Credit" refers to an agreement in which a bank provides assurance of payment to a seller on behalf of a buyer, under agreed-upon terms and conditions.
Definition of "Letter of Credit" as a Payment Guarantee
This definition ties "Letter of Credit" to its guarantee function in contracts.
"Letter of Credit" means a document from a bank confirming that payment will be made to a seller upon meeting specific contractual obligations and presenting required documentation.
Definition of "Letter of Credit" as a Documentary Credit
This definition connects "Letter of Credit" to its documentary nature in trade finance.
"Letter of Credit" refers to a type of bank credit that stipulates the submission of certain documents for payment, typically used in international trade transactions.
Definition of "Letter of Credit" as a Conditional Payment Instrument
This definition links "Letter of Credit" to its conditional nature in business agreements.
"Letter of Credit" means a financial document issued by a bank that promises payment to a seller upon the fulfillment of specified conditions, providing security to both parties.
Definition of "Letter of Credit" as an International Payment Tool
This definition applies "Letter of Credit" to international business transactions.
"Letter of Credit" refers to an agreement where a bank guarantees payment for goods or services provided internationally, contingent upon the submission of required shipping or financial documents.
Definition of "Letter of Credit" as a Trade Assurance
This definition connects "Letter of Credit" to its role in ensuring the fulfillment of trade agreements.
"Letter of Credit" means a bank-issued document that assures payment to a seller upon fulfillment of the contractual terms between the buyer and seller in a trade agreement.
Definition of "Letter of Credit" as a Secure Payment Option
This definition links "Letter of Credit" to its role as a secure payment option for both buyers and sellers.
"Letter of Credit" refers to a payment guarantee issued by a bank that provides security to the seller by ensuring payment will be made once the required documents are submitted.
Definition of "Letter of Credit" as a Financial Guarantee
This definition ties "Letter of Credit" to its function as a guarantee in financial transactions.
"Letter of Credit" means a financial assurance from a bank that the seller will receive payment from the buyer, provided the terms and conditions of the contract are met.
Definition of "Letter of Credit" as a Payment Instrument in Export Contracts
This definition connects "Letter of Credit" to its specific use in export contracts.
"Letter of Credit" refers to a bank-issued document used in international export transactions to guarantee payment for goods or services after presenting required documents.
Definition of "Letter of Credit" as a Credit Facility
This definition links "Letter of Credit" to its use as a credit facility in transactions.
"Letter of Credit" means a financial product issued by a bank that enables buyers and sellers to engage in transactions with assurance of payment upon meeting agreed terms.
Definition of "Letter of Credit" as a Financial Instrument in Business Transactions
This definition applies "Letter of Credit" to business transactions involving secured payment.
"Letter of Credit" refers to a document issued by a financial institution that secures payment for goods or services, ensuring the buyer fulfills their obligations.
Definition of "Letter of Credit" as a Payment Guarantee in Import-Export Agreements
This definition connects "Letter of Credit" to its role in guaranteeing payment in import-export agreements.
"Letter of Credit" means a promise made by a bank on behalf of the buyer, ensuring payment will be made to the seller once the terms of the trade agreement are met.
Definition of "Letter of Credit" as a Payment Assurance
This definition ties "Letter of Credit" to its role as an assurance of payment.
"Letter of Credit" means a financial instrument issued by a bank guaranteeing payment to the seller upon meeting specific conditions outlined in the contract.
Definition of "Letter of Credit" as a Documentary Proof of Payment
This definition connects "Letter of Credit" to its use as proof of payment documentation.
"Letter of Credit" refers to a document issued by a bank, serving as proof of payment for goods or services provided, contingent upon the submission of the correct documents.
Definition of "Letter of Credit" as a Payment Instrument in Supply Contracts
This definition links "Letter of Credit" to its use in supply contracts.
"Letter of Credit" means a document issued by a financial institution that guarantees the seller will receive payment for goods or services supplied, provided the agreed-upon terms are met.
Definition of "Letter of Credit" as a Transaction Security
This definition ties "Letter of Credit" to its function as transaction security.
"Letter of Credit" refers to a security instrument issued by a bank that ensures the seller will be paid for goods or services upon fulfilling specific contractual obligations.
Definition of "Letter of Credit" as a Guarantee in International Trade
This definition connects "Letter of Credit" to its specific application in international trade.
"Letter of Credit" means a bank-issued guarantee of payment to a seller involved in international trade, provided certain conditions are met and specified documents are presented.
Definition of "Letter of Credit" as a Financial Document for Exporters
This definition links "Letter of Credit" to its use by exporters.
"Letter of Credit" refers to a document issued by a bank that guarantees payment to exporters upon submission of the necessary documents, ensuring payment security in export transactions.
Definition of "Letter of Credit" as a Risk Mitigation Tool
This definition ties "Letter of Credit" to its role in mitigating financial risks.
"Letter of Credit" means a document issued by a financial institution that protects both the buyer and seller by ensuring payment to the seller upon fulfilling contractual requirements.
Definition of "Letter of Credit" as a Secure Payment Option for Importers and Exporters
This definition connects "Letter of Credit" to its role in securing payments for both importers and exporters.
"Letter of Credit" refers to a bank-issued document that provides security for both the importer and exporter by guaranteeing payment for goods or services upon submission of required documentation.
Definition of "Letter of Credit" as a Credit Guarantee for Sellers
This definition links "Letter of Credit" to its role as a credit guarantee for sellers.
"Letter of Credit" means a financial guarantee issued by a bank that assures the seller will receive payment once all the terms of the transaction have been fulfilled.
Definition of "Letter of Credit" as a Contractual Payment Guarantee
This definition ties "Letter of Credit" to its function as a guarantee in contractual agreements.
"Letter of Credit" refers to a document issued by a bank, ensuring payment to a seller upon meeting certain contractual obligations and submitting the required documents.
Definition of "Letter of Credit" as a Payment Mechanism for Goods or Services
This definition connects "Letter of Credit" to its role in securing payment for goods or services.
"Letter of Credit" means a payment mechanism issued by a bank, ensuring the seller will be paid for goods or services upon fulfilling specific contract terms and submitting proper documentation.
Definition of "Letter of Credit" as a Document for Payment in Export Transactions
This definition links "Letter of Credit" to its use in export transactions.
"Letter of Credit" refers to a bank-issued document that guarantees payment to the seller for goods or services provided in international trade, contingent upon the submission of required documents.
Definition of "Letter of Credit" as a Performance Guarantee
This definition ties "Letter of Credit" to its function as a performance guarantee.
"Letter of Credit" means a guarantee issued by a bank, ensuring the seller will receive payment for the performance of their contractual obligations.
Definition of "Letter of Credit" as a Payment Instrument in Cross-Border Trade
This definition connects "Letter of Credit" to its use in cross-border trade.
"Letter of Credit" refers to a financial instrument used in cross-border trade transactions, where a bank guarantees payment to the seller upon the fulfillment of agreed terms and presentation of documents.
Definition of "Letter of Credit" as a Bank’s Assurance of Payment
This definition links "Letter of Credit" to its role as a bank's assurance of payment.
"Letter of Credit" means a financial guarantee issued by a bank, ensuring that the seller will be paid as long as they meet the stipulated terms and conditions set out in the agreement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.