A revocable letter of credit is an agreement to honor a draft or other demand for payment when specified conditions are met and can only be changed by the seller.

Question

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A revocable letter of credit can be modified or cancelled by the issuing bank without the consent of the seller. It is not commonly used in international trade as it is not considered reliable for the seller. A irrevocable letter of credit, on the other hand, cannot be modified or cancelled without the consent of all parties involved.

A Revocable Letter of Credit Is an Agreement to Honor