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This entry was published on 2014-09-22
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"Letter of Credit" Term; "Confirmed Credit"
Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 2, PART 3
Section 2--325. "Letter of Credit" Term; "Confirmed Credit".

(1) Failure of the buyer seasonably to furnish an agreed letter of
credit is a breach of the contract for sale.

(2) The delivery to seller of a proper letter of credit suspends the
buyer's obligation to pay. If the letter of credit is dishonored, the
seller may on seasonable notification to the buyer require payment
directly from him.

(3) Unless otherwise agreed the term "letter of credit" or "banker's
credit" in a contract for sale means an irrevocable credit issued by a
financing agency of good repute and, where the shipment is overseas, of
good international repute. The term "confirmed credit" means that the
credit must also carry the direct obligation of such an agency which
does business in the seller's financial market.