The terms and conditions of a letter of credit must be strictly complied with before an Issuer is required to make any payment to the Beneficiary.
The letter of credit itself will provide the conditions that must be satisfied by the Beneficiary, and the Beneficiary in requesting payment must comply with these conditions.
Unless a letter of credit expressly provides otherwise, a requirement in a letter of credit that payment must be requested by a Draft authorizes the Beneficiary to present either a negotiable or a non-negotiable Draft.
Unless the letter of credit provides otherwise, banks will accept carbon copies, reprographic copies and copies produced by computerized systems. It is suggested that the letter of credit be drafted to require that the letter of credit itself must be presented when demand for payment or a Draft is presented to the Issuer. This will avoid any question as to whether the letter of credit was in fact established with respect to the Beneficiary.
A demand for payment or presentment of a Draft and conforming documents must be made prior to the expiration of the letter of credit.
The demand for payment or Draft must be made by a Beneficiary. Only a Beneficiary can draw under a letter of credit and a letter of credit is not transferable unless so designated in the letter of credit. The Beneficiary of a letter of credit may assign its right to receive the proceeds under the credit even if the credit itself cannot be transferred or assigned.