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Irrevocable Standby Letter Of Credit for Australia

Irrevocable Standby Letter Of Credit Template for Australia

An Irrevocable Standby Letter of Credit is a financial instrument issued by a bank that provides a payment guarantee to a beneficiary under specified conditions. Under Australian law, particularly governed by the Banking Act 1959 (Cth) and international banking practices (ISP98 and UCP 600), this document represents an irrevocable undertaking by the issuing bank to honor a payment obligation if the applicant defaults on their contractual obligations. It serves as a security instrument that can only be amended or cancelled with the agreement of all parties involved, providing a high level of payment assurance in commercial transactions.

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Irrevocable Standby Letter Of Credit

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What is a Irrevocable Standby Letter Of Credit?

The Irrevocable Standby Letter of Credit is a fundamental financial instrument used in Australian and international commerce to provide payment security in various commercial transactions. It is typically used when one party requires a secure payment guarantee from another party's bank, particularly in high-value commercial contracts, international trade, or performance guarantee situations. The document, governed by Australian law and international banking practices, contains specific terms including the credit amount, expiry date, drawing conditions, and required documentation for payment. This type of letter of credit is 'irrevocable,' meaning once issued, it cannot be modified or cancelled without the agreement of all parties involved, providing a high level of security to the beneficiary. The instrument is commonly used in situations where the beneficiary requires assurance of payment or performance from the applicant, backed by a bank's creditworthiness.

What sections should be included in a Irrevocable Standby Letter Of Credit?

1. Letter Reference and Date: Unique reference number and issuance date of the letter of credit

2. Issuing Bank Details: Complete name, address, and contact information of the issuing bank

3. Beneficiary Information: Full name and address of the party in whose favor the letter of credit is issued

4. Applicant Information: Full name and address of the party requesting the letter of credit

5. Credit Amount and Currency: Specified amount and currency of the standby letter of credit

6. Expiry Date and Place: Clear statement of when and where the credit expires

7. Form of Presentation: Specified format and location for presenting documents

8. Drawing Terms and Conditions: Detailed conditions under which the credit may be drawn upon

9. Required Documents: List of documents that must be presented for drawing under the credit

10. Partial Drawings Statement: Whether partial drawings are permitted or prohibited

11. Transfer Conditions: Whether and how the credit may be transferred

12. Governing Law and Rules: Applicable law and rules (e.g., ISP98 or UCP 600)

13. Bank Authorization: Authorized signatures and authentication by the issuing bank

What sections are optional to include in a Irrevocable Standby Letter Of Credit?

1. Automatic Extension Clause: Used when the letter of credit includes an evergreen clause for automatic renewal

2. Multiple Beneficiary Provisions: Required when the credit is issued in favor of multiple beneficiaries

3. Revolving Terms: Included when the credit is revolving rather than having a fixed amount

4. Special Instructions for Electronic Presentation: Required when electronic presentation of documents is permitted

5. Counter-Guarantee Provisions: Used when there is a counter-guarantee arrangement with another bank

6. Assignment of Proceeds: Included when assignment of proceeds is permitted and terms thereof

7. Confirmation Instructions: Required when the credit needs to be confirmed by another bank

What schedules should be included in a Irrevocable Standby Letter Of Credit?

1. Schedule A - Document Presentation Requirements: Detailed specifications for required documents and presentation format

2. Schedule B - Drawing Certificate Template: Standard format for beneficiary's drawing certificate

3. Schedule C - Bank Charges and Fees: Breakdown of all applicable bank charges and fees

4. Appendix 1 - Authorized Signatories: List of authorized signatories and specimen signatures

5. Appendix 2 - Form of Transfer Request: Standard format for requesting transfer of the credit

6. Appendix 3 - Form of Amendment: Template for any future amendments to the letter of credit

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant legal definitions



































Clauses






























Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Manufacturing

Energy and Resources

Import/Export

Real Estate and Property Development

Telecommunications

Mining

Shipping and Logistics

Relevant Teams

Treasury

Finance

Legal

Commercial Operations

Trade Finance

Risk Management

Compliance

International Banking

Credit Administration

Corporate Banking

Relevant Roles

Treasury Manager

Chief Financial Officer

Finance Director

Trade Finance Manager

Commercial Director

Legal Counsel

Banking Relationship Manager

Credit Manager

Risk Manager

International Trade Specialist

Corporate Banking Officer

Financial Controller

Compliance Officer

Documentary Credits Specialist

Project Finance 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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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