Letters of Credit

Letters of Credit

Application for standby letter of credit
To -(bank )
(address )
(date )
REQUEST FOR STANDBY LETTER OF CREDIT
We (name of account party ) of (address ) (`the Account Party ) request you to establish by [telex or cable or airmail] an irrevocable standby letter of credit in favour of (name of beneficiary ) of (address ) (`the Beneficiary ) for the account of the Account Party available up to an aggregate amount of ... by [acceptance and payment of the Beneficiarys draft[s] at sight or payment] against receipt by you of the following document[s]:
1. certificate of the Beneficiary that the Beneficiary has received (specify documents required to establish liability );
2. the certificate of the Beneficiary that the Account Party has failed to honour, in whole or in part, its obligations to the Beneficiary with respect to (specify obligations ) and that the amount of the Beneficiarys demand under the standby letter of credit is not greater than the total amount of sums then due and payable to the Beneficiary by the Account Party pursuant to those obligations.
Special instructions :(specify )
The credit is to expire on (date ) and the document[s] must be presented to you on or before that day.
WE AGREE WITH YOU as follows:
1. Indemnity against demands etc.
We shall indemnify you and keep you indemnified against all demands, claims, liabilities, losses, costs and expenses whatsoever (including all legal and other costs, charges and expenses you may incur in connection with the credit, or in enforcing, or attempting to enforce, your rights under this indemnity ) arising in relation to, or out of, the credit or as a result of your having established it. We shall pay and reimburse them to you on demand, together with interest on them as well after as before judgment, from the date when they were first paid or incurred by you until payment of them by us in full, at the rate of ... ) per annum above the cost to you (as conclusively determined by you ) of acquiring the funds to effect such disbursement. Such payment and reimbursement (including interest ) shall be either in the currency in which each sum was disbursed by you or, at your option, its equivalent in Naira [or NAIRA Pounds sterling or US dollars] at the rate prevailing at the date of such disbursement. We irrevocably authorise you, without prejudice to any other right or remedy, to debit such payment or reimbursement to any account which we may have with you.
2. Indemnity against loss from judgment etc.
We further agree that we shall indemnify you against any loss incurred by you as a result of any judgment or order being given or made for the payment of any amount due under this credit, and, where such judgment or order is expressed in a currency other than that in which such amount is payable by us under this credit, we shall indemnify you against any loss incurred by you as a result of any variation having occurred in rates of exchange between the date as of which such amount is converted into such other currency for the purpose of such judgment or order and the date of actual payment pursuant to it. This indemnity shall constitute a separate and independent obligation on our part and shall continue in full force and effect notwithstanding any such judgment or order as stated above.
3 Authorisation to make payments
We irrevocably authorise you to make any payments or comply with any demands which appear, or purport, to be claimed or made under the credit, without any reference to or further authority from us, without inquiry into the justification for it or the validity, genuineness or accuracy of any statement or certificate received by you with respect to or under the credit and despite any contestation on our part, and we agree that any such claim or demand shall be binding on us and shall, as between you and us, be accepted by us as conclusive evidence that you were liable to pay or comply with it.
4 Incorporation of standard conditions
The Uniform Customs and Practice for Documentary Credits shall in all respects apply.
5 Governing law and jurisdiction
6 Personal representatives
(include where the customer consists of one or more individuals )
All our obligations under the credit shall on our deaths bind our legal personal representatives.]
Signed
[Duly authorised for and on behalf of](account party )

 

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