Standby letters of credit
- Letters of credit guarantee payment after performance such as completing a
contract or delivering certain goods. A Standby Letter of Credit is to reduce
the risk associated with nonperformance in a contract that calls for
performance. In this sense, standby credits are comparable to performance bonds. For
example, a standby credit can be used when a city hires a contractor to
build a structure. The city may require the contractor to open a standby credit
with a local bank, and name the city as the beneficiary. If the contractor
ultimately fails to perform under the terms of the construction contract, the
city can collect money under the standby credit. The city can use this money
to hire another contractor, or otherwise complete the project.
Sarkis Detective Agency
1346 Ethel Street
Glendale, CA 91207-1826
If you can read this, thank a teacher. If you can read this in English,
thank a military veteran.
God Bless America and her allies forever !!
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