What is DOCUMENTARY CREDIT?

A commercial LETTER OF CREDIT committing the BANK to pay a named BENEFICIARY, such as a seller of goods, once a confirming document has been delivered to the buyer; the documentary credit is widely used in international trade transactions, where BILLS OF LADING often serve as the evidencing document. Also known as DOCUMENTARY DRAFT.

More On This Topic



Link to This Definition
Did you find this definition of DOCUMENTARY CREDIT helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary