L/C

 Transfer of documents, you don’t see the Effect of TRO re: L/C
goods yet
 Buyer just wants to get the materials 4 stages
 Seller just wants to see payment  Interest
 Third party yung issuing bank, the one who
gives credit, primarily responsible
 Credit is in the form of a letter – a
guarantee of payment
 Flow: Local
o Buyer -> Seller (Beneficiary)
o Issuing Bank
 Flow: Int’l
o Correspondent Bank (A.B)
o Confirming Bank
o Discounting Bank – Bamerica
o Paying Bank

Bank Draft
 Form of bill of exchange used in
transactions bet. Perons who are physically
remote from each other
 Order Made by one person (seller)
addressed to a person having in his
possession funds of such buyer, ordering
the addressee to pay the price to seller of
goods OR beneficiary w/c is the holder of
the draft where the order is made by a bank
to another bank
 Part and parcel of the negotiable
instrument?

SWIFT
 Society for Worldwide Interbank Financial
Telecommunications
 Messaging network that financial
institutions use to securely transmit info
and instructions thru a standardized system
of codes

Standby L/C
 Sign of good faith in business transactions,
proof of a buyer’s credit quality and
repayment abilities.
 Bank issuing SLOC will perform brief
underwriting duties to ensure the

Independence Principle