Letters of Credit (L/C) are a documentary credit issued by a bank on behalf of a buyer of goods to a seller. The bank promises to pay the seller once they provide documents showing the goods were shipped according to the terms of the L/C. L/Cs allow banks to act as intermediaries, assuring payment for the seller while also assuring the buyer only pays once the goods are received. There are different types of L/Cs including standard, revolving, and standby credits. L/Cs provide advantages of guaranteed payment for sellers and assurance goods will be delivered for buyers, but do not ensure quality of goods or resolve other disputes.