Letters of Credit in General

Letter of credit transactions have been developed since the Middle Ages in connection with the trade of goods at the international level. Individuals and companies have found themselves dealing with partners of whom they know little, located in distant countries with often insecure political and economic situations. Furthermore, the dynamism of the economy creates a need for financing that requires a guarantee of payment at a time and for an amount that must be certain. Diversity in geographical nature, weather, climate, production system, and globalization in culture and fashion has made the countries dependent on each other for the daily necessities. Similarly, one continent is largely dependent on the products of other continents. In addition, diversity in human appetite and attitude, unequal development of technology, desire for luxury, and the development of communication systems and tale-communication revolutionarily increase the necessity of transnational, transcontinental business activities.

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