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What is the meaning of red clause?

Updated: 9/13/2023
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14y ago

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Special provosion in documentary credit where the beneficiary (usually the seller) is authorized to obtain an advance from the corresponding bank on an unsecured basis. The liability for default is assumed by the account party (usually the buyer) through the issuing bank. This clause is written usually in red ink, hence the name.

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14y ago
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Q: What is the meaning of red clause?
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