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Letter Of Credit Contract Template for Saudi Arabia

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Key Requirements PROMPT example:

Letter Of Credit Contract

"I need a Letter of Credit Contract for a $5 million manufacturing equipment purchase from a German supplier, with our Saudi Arabian company as the applicant, requiring full Sharia compliance and Deutsche Bank as the advising bank, with document presentation deadline of March 15, 2025."

Document background
The Letter of Credit Contract is a crucial document in international trade finance, particularly within the Saudi Arabian jurisdiction where it must comply with both Islamic banking principles and international banking standards. This document is typically used when parties seek a secure method of payment in international trade transactions, providing assurance to sellers of receiving payment and to buyers of receiving goods as specified. The contract outlines the conditions for payment, document requirements, and responsibilities of all parties involved, while ensuring compliance with SAMA regulations and Sharia principles. It includes specific provisions for document presentation, payment terms, and bank obligations, incorporating relevant aspects of UCP 600 while maintaining alignment with Saudi Arabian commercial law and Islamic banking requirements.
Suggested Sections

1. Parties: Identification of all parties: Applicant, Beneficiary, Issuing Bank, and any Advising/Confirming Banks

2. Background: Context of the underlying transaction and purpose of the Letter of Credit

3. Definitions: Key terms used throughout the contract, including banking, trade, and Sharia-compliant terminology

4. LC Amount and Currency: Specification of the credit amount and currency of payment

5. Validity Period: Expiry date and place of the Letter of Credit

6. Documentation Requirements: List of required documents for LC presentation and their specifications

7. Payment Terms: Conditions and timing of payment, including Sharia-compliant payment structures

8. Bank Charges: Allocation of banking fees and charges between parties

9. Presentation Requirements: Timeframes and procedures for document presentation

10. Governing Law and Jurisdiction: Specification of Saudi law and relevant jurisdiction for disputes

11. Notices: Communication procedures and contact details for all parties

Optional Sections

1. Confirmation Instructions: Used when a confirming bank is required to add its confirmation to the LC

2. Transferability Clause: Include when the LC needs to be transferable to another beneficiary

3. Partial Shipments/Drawings: Required when allowing or prohibiting partial shipments or drawings

4. Red Clause Provisions: Include when advance payment facilities are required

5. Islamic Finance Compliance: Detailed Sharia compliance provisions when required by parties

6. Force Majeure: Special provisions for unforeseeable circumstances affecting LC execution

7. Assignment of Proceeds: Include when beneficiary needs to assign proceeds to third parties

Suggested Schedules

1. Schedule 1: Commercial Invoice Requirements: Detailed specifications for acceptable commercial invoices

2. Schedule 2: Transport Document Requirements: Specifications for bills of lading or other transport documents

3. Schedule 3: Insurance Document Requirements: Details of required insurance coverage and documentation

4. Schedule 4: Inspection Certificate Requirements: Specifications for any required inspection certificates

5. Schedule 5: Bank Details: Complete banking information for all parties involved

6. Appendix A: UCP 600 Incorporation: Specific UCP 600 articles applicable to this LC

7. Appendix B: Sharia Compliance Certificate: Certificate from recognized Sharia board confirming compliance

8. Appendix C: Standard Forms: Templates for amendments, presentations, and other standard communications

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions































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Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Shipping and Logistics

Insurance

Retail

Wholesale

Construction

Energy

Agriculture

Mining

Telecommunications

Relevant Teams

Legal

Finance

International Trade

Treasury

Compliance

Risk Management

Banking Operations

Documentary Credits

Supply Chain

Procurement

Shipping and Logistics

Relevant Roles

Trade Finance Manager

International Banking Officer

Credit Manager

Import/Export Manager

Treasury Manager

Compliance Officer

Documentary Credits Specialist

Banking Operations Manager

Financial Controller

Risk Manager

Legal Counsel

Sharia Compliance Officer

Trade Operations Manager

Chief Financial Officer

Supply Chain Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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