Miranda Airways, a commercial air carrier, has a contract with Wurtherton Inc., an airplane manufacturer, to purchase a new plane. Due to a sudden shortage of cash, Miranda Airways goes to MetrosBank. MetrosBank issues a document to Wurtherton that if Miranda does not pay for the transaction, MetrosBank would. Wurtherton considers the offer and then sends an acceptance with additional terms. The additional terms stipulate that Miranda Airways could have the new airplane for a period of 10 years and then return it to Wurtherton. Miranda Airways agrees to the acceptance, and Wurtherton hands over the new airplane to them. Which of the following documents did MetrosBank issue to Wurtherton to help Miranda Airways secure the airplane?

Question

Quizplus · Accepted Answer

MetrosBank issued a letter of credit which ensured that if Miranda Airways was unable to pay for the transaction, the bank would cover the costs. This document helped Miranda Airways secure the airplane from Wurtherton.

Miranda Airways, a Commercial Air Carrier, Has a Contract with Wurtherton