Business Studies, asked by Jinesh2209, 1 year ago

Who is refered as principal in documentary credit?

Answers

Answered by sachinarora2001
0
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❤ Ans - - - A letter of credit is known as a letter of credit. It is a document used in the international trade to perform economic functions as a gurantee by allocation of risk... under contracting parties...

A letter of credit primarily achieved this by creating a written commitment from a bank on behalf of one party that payment made to a third party, provided that the terms and conditions stated there in have been met.


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Answered by Anonymous
48

Explanation:

A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade.

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