Document background
The Irrevocable LC is a fundamental trade finance instrument used to facilitate secure international trade transactions. It is particularly vital when parties are in different countries and need a reliable payment mechanism. The document, governed by U.S. law and typically incorporating UCP 600, provides an irrevocable commitment from a bank to pay the beneficiary upon presentation of compliant documents, regardless of any disputes between the buyer and seller. This instrument is commonly used in large commercial transactions, import/export operations, and when parties seek additional security in their trade dealings. The irrevocable nature means it cannot be modified or canceled without the agreement of all parties involved, providing essential security for international trade participants.
