Abbreviation: L/C. Method of payment between buyer and seller. The buyer opens a Letter of Credit in favor of the seller at their local bank by depositing the amount of the purchase price and dictating certain documents which the seller must present in order to obtain a payment. The Letter of Credit will be sent to a bank in the vicinity of the seller and upon presentation of the documents called for, the local bank will release payment. → Confirmed Letter of Credit → Deferred Payment Credit → Discrepancy Letter of Credit → Documentary Credit → Irrevocable Letter of Credit → Red Clause Letter of Credit → Revocable Letter of Credit → Transferable Letter of Credit → Uniform Customs and Practice for Documentary Credits
