Fact Pattern 22-1
Naida Baronowski is an American fashion designer who has a design firm in Chicago. Naida has been successful in the U.S. and wants to expand her operation overseas. She hopes to open shops in Paris, Milan, Madrid, Rome, Vienna, and Moscow in the next several years.
Naida is unfamiliar with foreign operations. She comes to you, her attorney, for advice about how she should pursue her goal of becoming an international fashion company.
-Refer to Fact Pattern 22-1. Naida hires a contractor in Moscow to supervise building a new store. To pay the subcontractors, Naida goes to her bank (an international bank with a branch office in Moscow) and signs an agreement stating that the bank will pay the subcontractors upon presentation of documentation that their work is completed. Naida has arranged for:

Question

Quizplus · Accepted Answer

By signing an agreement with her bank that it will pay the subcontractors upon presentation of completed work documentation, Naida has arranged for letters of credit. Letters of credit are a common method of international trade transactions and provide security for both the seller and the buyer. The bank acts as an intermediary and guarantees payment to the seller once they provide proof that work has been completed. This minimizes the risk for both parties involved in the transaction.

Fact Pattern 22-1 Naida Baronowski Is an American Fashion Designer Who Has a Who