Crack the Code — UCC Article 5 Decoded

UCC Article 5: Letters of Credit — The Backbone of Big Business Deals

UCC Article 5 covers letters of credit, which are powerful financial tools often used in large or international transactions. A letter of credit is like a bank’s promise to pay on someone else’s behalf — as long as certain conditions are met. It’s how businesses buy and sell with confidence, even across borders. While this article is more common in corporate or trade finance, it’s still important for anyone learning how the money and trust system works in higher-level deals.

🧠 In This Article, You’ll Learn:

• What a letter of credit is and why businesses use them

• The roles of the issuer (bank), applicant (buyer), and beneficiary (seller)

• How letters of credit guarantee payment even when buyers and sellers don’t know each other