texts: L / C stands for ' letter of credit ' . This is necessary for trade between two countries . A Letter of Credit is quite literally that — a letter addressed by the buyer's bank to the seller's bank stating that they could vouch for their good customer , the buyer , and that they would pay the seller in case of the buyer's default . Nowadays , it's sometimes used for domestic trade too .
labels: So the other party could be across the world or just on the other side of the street !