A considerable proportion of international trade is financed by banks through a system of documentary credits. Under this system the prospective buyer requests his bank to open a credit in favour of the seller. In order to draw on this credit the seller is required to ship the contract goods and then to submit appropriate documents in the required form to the bank. The precise obligations of the parties will depend on the terms of the individual credit but standard formats for such arrangements are recommended by the International Chamber of Commerce under the title ‘Uniform Customs and Practice for Documentary Credits’.94 Thus under the normal c.i.f. contract, once the goods are shipped the seller is required to submit to the bank the bill of lading together with the original sales invoice, and a policy of insurance covering the goods during transit. On the presentation of these documents in the form required by the bank, he is then entitled to payment of the contract price. There can be no doubt as to the vital importance of the bill of lading to any system of documentary credits. At the initial stage the bank is able to check the information on the bill to ensure that the seller has complied with all the conditions imposed by the bank for granting the credit, before it makes any advance. Thus statements on the bill indicating the quantity and description of the goods shipped will be checked with the corresponding details on the sales invoice to see if there is any discrepancy. Of equal importance to the bank will be the date on which the goods were shipped, whether they were shipped in good order and condition and whether or not they were loaded on deck. The credit will normally call for a shipped bill of lading rather than one merely acknowledging that the goods have been ‘received’ by the carrier, while banks are usually reluctant to accept clauses in a bill incorporating terms from any charterparty that may be operative in relation to the carrying vessel. In addition to the information contained in the bill, the bank is interested in its attribute as a negotiable document of title, capable of providing the required security for the credit. In the event of the creditor defaulting, the bank can thus assume control of the goods through the bill and so recoup its loss. There is, however, one possible security weakness in that bills are normally issued in sets of several originals. There is always a risk that the holder of one of the other originals may obtain delivery of the goods at the port of discharge before the bank. In order to avoid this eventuality the terms of the credit normally provide for the delivery of all bills in the set before any money is advanced by the bank.