Commercial Law, 2012 Bar — Question 1

MULTIPLE CHOICE

Letters of Credit are financial devices in commercial transactions which will ensure that the seller of the goods is sure to be paid when he parts with the goods and the buyer of the goods gets control of the goods upon payment. Which statement is most accurate? A) The use of the Letter of Credit serves to reduce the risk of non-payment of the purchase price in a sale transaction. B) The Letters of Credit can only be used exclusively in a sales transaction. C) The Letters of Credit are issued for the benefit of the seller only. D) (a), (b) and (c) are all correct.

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