Durable Goods Inc., a U.S. firm, and Économique S.A., a French company, contract for an international sale of goods with the use of a letter of credit issued by Finance Corporation. In this transaction, the letter protects

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The letter of credit primarily protects both the buyer (Durable Goods Inc.) and the seller (Économique S.A.) in an international transaction. It ensures the seller receives payment as long as the terms of the credit are met, and it assures the buyer that the bank will only pay the seller upon the presentation of the documents evidencing shipment of the goods as specified in the letter of credit.