a letter of credit is one of the international payment methods. it can be defined as a written promise of the 1 acting at the request and on the instructions of the 2 to make a payment to the beneficiary. the L/C is based on the 3 while the remittance and collection are based onn commercial credit which is generally considered less creditable. the L/C is issued on the basis of the sales contract but independent of it. under a L/C, the banks deal with 4 rather than 5 , the banks have to pay if the documents presented to them are complied with the terms and conditions.