Martha approaches Stellar Constructions to buy construction equipment. Martha provides Stellar Construction with a written commitment issued by her bank stating that payment will be made to Stellar Constructions as long as all selling conditions have been met. It is evident that Martha uses _____ to pay Stellar Constructions.

Question

Quizplus · Accepted Answer

A commercial letter of credit is a financial document issued by a bank on behalf of the buyer (Martha), guaranteeing payment to the seller (Stellar Constructions) under the condition that the terms specified in the letter are fully met. It is a common payment method in international trade to mitigate risks.

Martha Approaches Stellar Constructions to Buy Construction Equipment