Documents
Letter of Credit (L/C)
Letter of Credit (L/C) is a bank undertaking to pay against a complying presentation of documents under the credit's terms.
Understand it in practiceWhere it fits in the journey
Highlighted stages are commonly relevant- 01Agree — commonly relevant
- 02Prepare
- 03Transport
- 04Clear — commonly relevant
- 05Deliver
Letter of Credit (L/C) at a glance
- Bank undertaking
- Required documents
- Complying presentation
Does a letter of credit guarantee the physical quality of goods?
Banks examine documents, not the physical condition of the cargo. Have trade-finance specialists review the terms before shipment.
Give each document its own job
| Document | Main question it answers |
|---|---|
| Commercial invoice | What was sold, by whom and at what value? |
| Packing list | What is inside each physical package? |
| Transport document | Who carries the goods and how are they released? |
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Before you book
For documents, have these details ready:
- Correct legal parties and shipment references
- Matching product descriptions, pieces and weights
- Required originals, authorizations and release instructions
Sources & further reading
Plain-language educational guidance. The applicable contract, carrier tariff, official rules or insurance policy takes precedence. Illustrations show concepts, not a specific shipment or facility.
Published by Allwayforward as a plain-language freight reference. Examples are illustrative, not customer case studies. For a correction, send the term and supporting source.