A Practice Note providing an overview of commercial letters of credit, also known as documentary letters of credit, which are frequently used to make payments in transactions for the sale of goods and services, especially in cross-border transactions. This Note examines the structure of letter of credit transactions and the independence principle that defines the relationship between the letter of credit and the underlying sale transaction, as well as detailing the provisions of the Uniform Commercial Code (UCC) and the Uniform Customs and Practice for Documentary Credits (UCP) that commonly apply. It focuses on the parties, processes, and documents involved, and includes a detailed analysis of the terms of a letter of credit.