Letter of Credit Documents:
- Invoice: The invoice is evidence of the contract that exists between the buyer and seller. It must specify the quality and quantity of the goods consigned, together with the unit and total price. In some instances the buyer will insist upon the invoice being certified by an independent body such as a Chamber of Commerce and may even demand that his country’s Consul confirm this certification. Some countries because of import restrictions may require a Consular Invoice in addition to a commercial invoice.
- Insurance: The documentary credit in the example covers a CIF sale and therefore demands a certificate of insurance.
- Bill of Lading: It is in this area where a documentary credit is most specific because in its role as a document of title the bill of lading is the ultimate security for payment. The description of the cargo and all the other stipulations in the documentary credit have been complied in Bill of Lading. Even the slightest deviation may result in payment being refused or delayed. Note in the documentary credit the use of the word ‘clean’ in the description of the bills of lading. The bill of lading would not be ‘clean’ if it contained any endorsement relating to the condition of the cargo and such an endorsement would guarantee refusal by the bank.
- Other Documents: In addition to the documents mentioned in the example the buyer may demand such things as a Certificate of Origin, a Phytosanitary Certificate, a Certificate of Analysis or other type of independent inspection. It is on these documents that the Buyer relies to provide evidence that the goods covered by the Invoice are indeed what he expects them to be, as he will part with his money at the same moment as the documents are released to him.