Fact Pattern 9-1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.

-Refer to Fact Pattern 9-1.First State Bank

Question

Fact Pattern 9-1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.

-Refer to Fact Pattern 9-1.First State Bank

Quizplus · Accepted Answer

First State Bank's obligation is to make payment when Lapland presents the proper documents, as stated in the letter of credit agreement. They are not responsible for making sure that the parties perform the contract, and will only make payment once the transaction has been completed as per the terms of the agreement.

Fact Pattern 9-1 First State Bank Issues a Letter of Credit in Favor