What is the effect of the buyer’s failure to procure a Letter of Credit to the main contract?
The Letter of Credit is independent from the contract of sale. Failure of the buyer to open the Letter of Credit does not prevent the birth of the Sales Contract. (Reliance Commodities, Inc. v. Daewoo Industrial Co. Ltd., G.R. No. 100831, Dec. 17, 1993) The opening of the Letter of Credit is only a mode of payment. The LC is not an essential requisite to the contract of sale.