A letter of credit is considered an informal contract as it does not have a special method of creation.

Name: A letter of credit is considered an informal contract as it does not have a special method of creation.
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A letter of credit is actually a formal contract that is created through a specific method involving application, issuance, and approval by the bank. It includes terms and conditions agreed upon by both the buyer and the seller, and is legally binding.

A Letter of Credit Is Considered an Informal Contract as It