The type of letter of credit issued to guarantee that a party will fulfill its obligations under a service,construction,or sales contract is called:

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A standby letter of credit is issued to guarantee that a party will fulfill its obligations under a service, construction, or sales contract. It is commonly used in place of a performance bond or cash deposit, and is often requested by contractors, suppliers, and vendors as a way to ensure payment and performance. Irrevocable letters of credit, confirmed letters of credit, and letters of warranty credit are all different types of letters of credit, but they are not specifically designed to guarantee contract performance.

The Type of Letter of Credit Issued to Guarantee That