Verbiage Letter Of Credit Template for Singapore

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Key Requirements PROMPT example:

Verbiage Letter Of Credit

"Need a Verbiage Letter of Credit for an international machinery purchase from Singapore to Germany, value of USD 500,000, with payment to be made in three installments and expiry date of March 15, 2025."

Document background
The Verbiage Letter of Credit is a crucial instrument in international trade finance under Singapore law. It serves as a bank's written commitment to pay a seller (beneficiary) a specified amount, provided they present documents exactly as stipulated in the LC. Singapore, as a major financial hub, follows both local banking regulations and the internationally recognized UCP 600 rules for Letters of Credit. This document is particularly vital when parties seek a secure payment method in cross-border transactions, offering protection to both buyers and sellers by ensuring payment is made only upon strict compliance with documented conditions.
Suggested Sections

1. Letter Reference: Unique identification number and date of the LC

2. Issuing Bank Details: Complete details of the bank issuing the LC including name, branch, address and contact information

3. Beneficiary Details: Complete details of the party receiving payment including full name, address and banking information

4. Applicant Details: Complete details of the party requesting the LC including full name, address and contact information

5. Currency and Amount: Specified currency and maximum amount of the LC, including both numerical and words format

6. Expiry Details: Expiry date and place of the LC, including presentation period requirements

7. Payment Terms: Specific conditions and timing of payment, including method of payment and required documentation

Optional Sections

1. Transferability Clause: Optional clause specifying whether and how the LC can be transferred to another beneficiary

2. Revolving Credit Clause: Optional clause detailing terms for automatic renewal of the LC

3. Red Clause: Optional clause allowing for advance payment to beneficiary before document presentation

4. Back-to-Back Provisions: Optional provisions for when the LC is used to support another LC

Suggested Schedules

1. Required Documents List: Comprehensive list of all documents required for LC execution and payment

2. Special Conditions Appendix: Additional terms, conditions, and requirements specific to the transaction

3. Shipping Terms Schedule: Detailed shipping requirements, Incoterms, and delivery conditions if applicable

4. Fee Schedule: Breakdown of all applicable fees, charges, and commission rates

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

Banking Act (Chapter 19): Primary Singapore legislation governing banking institutions and their operations, including the issuance of letters of credit

Bills of Exchange Act (Chapter 23): Key legislation governing negotiable instruments and related banking documents in Singapore

Electronic Transactions Act (Chapter 88): Legislation governing electronic transactions and digital signatures, relevant for electronic letters of credit

UCP 600: Uniform Customs and Practice for Documentary Credits - International rules governing the operation of Letters of Credit, widely adopted in Singapore

ISBP: International Standard Banking Practice - Detailed guidelines for examining documents under UCP 600

ICC Rules: International Chamber of Commerce rules providing additional guidance for international trade finance

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore governing banking practices

ABS Guidelines: Guidelines issued by the Association of Banks in Singapore for standardized banking practices

Singapore Contract Law: General principles of contract law in Singapore applicable to Letters of Credit

Civil Law Act: Singapore legislation governing civil law matters including contractual relationships

AML/CFT Regulations: Anti-Money Laundering and Countering the Financing of Terrorism regulations applicable to trade finance

Foreign Exchange Regulations: Regulations governing foreign exchange transactions in Singapore

Singapore Case Law: Relevant court decisions from Singapore courts regarding Letters of Credit interpretation and enforcement

English Common Law Principles: Relevant principles from English common law that influence Singapore's legal system due to historical ties

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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