letter of credit

Definitions

Accounting

  • noun a document issued by a bank on behalf of a customer authorising payment to a supplier when the conditions specified in the document are met.

Construction

  • Letter from a lender that promises to pay a beneficiary a specified sum of money for performance of a specific set of conditions, occasionally used in lieu of a payment bond.

Economics

  • A common means of payment in international trade, this is a written commitment by a bank to make payment to an exporter on behalf of an importer, under specified conditions.

Law

  • noun a letter from a bank authorising payment of a specific sum to a person or company, usually in another country.

Publishing

  • noun a letter from a bank allowing somebody credit and promising to repay at a later date.
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