Jill meets jack student dating

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A standby letter of credit is an arrangement in which a bank guarantees payment to a "beneficiary" if something fails to happen.To do so, the bank issues a document which describes the conditions that will cause the bank will pay.Commercial letters of credit are more common in international trade.

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Instead, the buyer and seller agree to certain conditions that trigger payment, and the bank follows directions if those events occur.Performance aspect: Standby letters of credit are also unique because they can include a performance component—or negative performance, if you prefer.If a service is not performed, the beneficiary gets paid.Ultimately, the funds come from the customer who applies for the letter of credit, but the bank is responsible for paying the recipient.Standby letters of credit, like standard letters of credit, are useful for international trade as well as domestic transactions like local building projects.

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