Contract on establishing a documentary letter of credit

Payment trough documentary credit is one of the most usual instruments of payment in banking practice, especially in foreign trade. Considering that documentary credit is a complex legal act, the subject of this paper is only the contract of documentary credit opening, which develops with principal's instruction for credit opening and bank's acceptance. Practically, this is the beginning of documentary credit legal act. Here will be elaborated, in details, the conception and the legal nature of the contract of documentary credit opening, as well as arrangement and its legal effects. Uniform Customs and Practice for Documentary Credits (UCP 600) are implemented in banking practice from 1 July 2007. First analysis provides the results that most of the banks in the world successfully have adapted their forms and business practice to new rules. These rules provide the easier international business practice, which have become simpler and more effective, especially because of new interpretations of some terms, which have eliminated the earlier dilemmas and confusion. In this meaning, this instrument has its full signification, because of practical importance of payment. New rules have contributed to the European and worldwide integrations, as well as unification of banking practice.