A revocable letter of credit is an agreement to honour 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 changed or cancelled by the issuing bank without the consent of the seller. Therefore, it is not a secure form of payment for the seller. Most letters of credit issued today are irrevocable, meaning that they cannot be changed or cancelled without the consent of all parties involved.

A Revocable Letter of Credit Is an Agreement to Honour