Impacts of Mistyping and Dictation Errors on the Contracts of Letters of Credit

From among various ways of payment, letters of credit are widely used as a reliable and secure way of payment. In spite of attractions of this way of payment, having chosen to use letters of credit, the international merchants have faced many problems. This difficulty becomes clearer when the standard of correspondence of letters requested by Banks are taken into account; and this, in turn, increases the risk of non-payment for goods and services provided and may be of profound influence on the international commercial contracts. According to a global study, more than 70% of the letters presented to banks are not accepted by Banks in the first stage. This shows that the rules governing application of the principle of correspondence are not sufficiently clear.For this reason, the author tries to analyze the principle of accurate correspondence of letters in such a way that efficiency of LCs may increase. The present study covers all parties of the operations on LCs in general, and discusses dictations errors and mistyping in LC's in particular.