Bank Guarantee Vs Letter Of Credit
A letter of Credit differs from a Bank Guarantee. An issuing or confirming Banks’ obligation is independent of, and unqualified by, the contract of sale under the transaction. A commercial credit is neither a performance bond, nor it is a guarantee or quality of the goods shipped. The credits stipulate documents which have to be tendered for payment and it, therefore, follows that in credits parties deal with documents and not with goods, services or performances to which the documents relate.
Great piece of writing ! I am in the process of writing a blog entry on letters of creditand your information is very welcome.