DBJJJ, INC. v. National City Bank

Opinion

COOPER, P. J.

A documentary letter of credit is a method of payment whereby the promise of a stable financial source, usually a bank, is substituted for the promise of a credit applicant, usually a purchaser of goods. (Paramount Export Co. v. Asia Trust Bank, Ltd. (1987) 193 Cal.App.3d 1474 [238 Cal.Rptr. 920].) At least three separate, independent transactions underlie the letter of credit: (1) the undertaking from the issuer of the letter of credit to the beneficiary; (2) the agreement between the issuer and the credit applicant; and (3) the underlying contract between the applicant…