„Commercial Letter of Credit“

An instrument by which a bank substitutes its credit for that of a customer to enable him to finance the purchase of goods or to incur other commitments. The bank issues a letter (or document) on behalf of its client to a supplier and agrees to pay them upon presentation of documentary evidence that the supplier has performed in accordance with the terms of the letter of credit.

Mann, Ronald J. “Payment Systems and Other Financial Transactions: Cases, Materials, and Problems.” Wolters Kluwer Law & Business, 5th Edition, 2011, pp. 540-561.