Question

Fill in the blanks with words that would best complete the passage.

carrier reimburses receiver catalog of goods    buyer    settles    bill of lading seller    issuer

When an international transaction will be completed with a letter of credit, the buyer will contact the ______ bank, outlining the bank's obligations to pay on the letter of credit and the buyer's obligation to pay the bank.

The letter of credit is sent to the _____, stating that once the seller complies with the terms of the agreement, and presents the proper documentation, the bank will pay the seller for the goods. The seller then delivers the goods to the carrier and receives a ____. The seller delivers that document to the bank who then pays on the letter of credit. The bank delivers the document to the buyer, who then delivers it to the ____. The carrier will then deliver the goods to the buyer, who finally ____ with the bank.

Answer 1

1.issuer

2. Buyer

3. Bill of landing

4. Receiver

5. Settles

Letter of Credit is a contract of the sale of documents. It allows the seller to obtain payment from the buyer's bank upon the presentation of certain documents, usually including a bill of lading, which provides evidence that the goods have been shipped. to obtain a letter of credit, the buyer usually goes to its bank in the foreign nation and asks the bank to issue a credit in favor of the seller. By requiring a letter of credit from the buyer, the seller is able to obtain an assessment of the buyer's creditworthiness by a financial institution in the buyer's home location.

The bill of Lading is a contract of carriage under which the carrier promises to transport the goods to a certain destination in exchange for a fee paid by the seller to the carrier.