Answer all the questions
QUESTION1) ‘A letter of credit transaction essentially comprises a number of contracts entered into by the various parties involved. The rights and obligations of the various parties are thus determined and governed by the terms of the respective contracts, interpreted against the background of the country’s law relating to contracts.’
Banks play a significant role in letters of credit/documentary credit. Discuss the rights and obligations that are created within the legal relationship between the parties.
QUESTION2) Describe the process involved in terms of a contract of international sales which provides that payment must take place by way of letter of credit.
2.1 Name and discuss the parties to a documentary letter of credit.
2.2 Describe the process of a documentary letter of credit.