Allison,a dress designer,believes that she has a great deal with a company in Ireland,called Fashion,which has agreed to purchase a number of her dresses.The manager of Fashion,however,insists on delivery of the dresses before payment will be provided.Which of the following would be a good idea for Allison?

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A documentary letter of credit would provide security for Allison by ensuring that payment will be made upon proof of delivery, reducing the risk of non-payment. This is a common international trade practice to mitigate payment risk. Insisting on a letter of credit issued by the buyer may not provide the same level of security as it will depend on the creditworthiness of the buyer, whereas a documentary letter of credit will be dependent on a reputable issuing bank. Personal delivery is not practical for international trade, and turning down the deal may also not be a viable option for Allison.

Allison,a Dress Designer,believes That She Has a Great Deal with a Company