International contracts often require letters of credit to facilitate payment for the goods subject to the contract.

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Letters of credit are commonly used in international trade transactions to provide payment security for both the buyer and seller. The letter of credit is issued by a bank and guarantees payment to the seller upon submission of the required documents. This helps to mitigate the risk of non-payment and protect the interests of both parties involved in the transaction.

International Contracts Often Require Letters of Credit to Facilitate Payment