Letter that a bank issues that authorizes the bearer to draw a certain amount of money from the bank, its branches, or other banks or agencies with which it is associated. In the law of secured transactions, letters of credit are not accounts.
Definition from Nolo’s Plain-English Law Dictionary
A letter from a bank or other financial institution guaranteeing payment of a certain amount on behalf of a customer. The letter of credit substitutes the bank's credit for the customer's credit. Letters of credit are used primarily to facilitate international transactions.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:19 pm