Comparison of Letter of Credit with Bill of Exchange

Although the letter of credit is known as evolved version of bill of exchange and like bill of exchange and promissory note and check, it is a means of payment for goods and services and an instrument for fulfillment of the obligation (payment of the debt) arising out of underlying agreement, no reliable comparative study of common aspects and differences of letter of credit and negotiable instruments are seen. This article aims to compare letter of credit to bill of exchange and other similar instruments regarding the applicable legal regime, legal nature and characteristics and peculiarities of the obligation/s reflected in the said documents.