Definition

Under the Irrevocable Straight Documentary Credit, the obligation of the Issuing Bank is extended only to the Beneficiary in honoring Draft(s)/Document(s) and usually expires at the counters of the Issuing Bank. This kind of Documentary Credit conveys no commitment or obligation on the part of the Issuing bank to persons other than the name Beneficiary.

Banks and other financial institutions may elect to purchase the Beneficiary's Drafts/Documents. However, the purchaser of a Draft drawn/Document presented under such Credit acquires no rights against the Issuing Bank under the Documentary Credit. This kind of Documentary Credit conveys no engagement by the Issuing Bank to protect such purchasers of Drafts/Documents. The purchaser of a Draft/Documents presented under a straight Documentary Credit only has the right to present the Draft/Documents on behalf of the Beneficiary.

The engagement of the Issuing Bank under this kind of Documentary Credit is normally indicated in the Documentary Credit as available for payment by the Issuing Bank and expiring for presentation of documents at the offices of the Issuing Bank. Alternatively, the engagement of the Issuing Bank may be stated more explicitly as follows:

"We hereby agree with the beneficiary that all Drafts drawn under and/or documents presented hereunder will be duly honoured by us provided the terms and conditions of Credit are complied with and that presentation is made at this office on or before(the expiry date)", or words of similar intent.

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