A Standby Letter of Credit (SBLC) acts as a guarantee to ensure payment for a deal, issued by an Issuer for a Beneficiary on request by an Applicant. This Letter of Credit is particularly useful in international trading, where parties may not know each other's credibility well. The Bank issuing this Standby Letter of Credit acts as a guarantor for the Applicant, assuring the Beneficiary that the Applicant's obligation would be fulfilled. In the worst-case scenario, where the Applicant escapes liability, the Beneficiary can claim payment from the Bank. This Letter is "Standby" as the Bank is only obliged to pay in the worst-case scenario. The Letter sets the responsible jurisdiction and governing laws, preventing any disputes regarding the relevant laws. The party names, maximum amount, currency, payment date, and effective period shall be clearly stated in the Letter. This Standby Letter of Credit is subject to International Standby Practices 98, International Chamber of Commerce Publication No. 590, and governed by the laws of the specified jurisdiction.

How to use this Document? 

Steps to use this Standby Letter of Credit (SBLC) document:

1. Understand the purpose of the document: This document serves as a guarantee to ensure payment for a deal is made, particularly in situations where parties do not know each other's credibility well enough.

2. Familiarise yourself with the contents of the document: The document includes important information such as the names of the parties involved, the maximum amount with corresponding currency, payment date, effective period, and the governing laws.

3. Ensure all parties agree to the terms of the document: Before signing the document, make sure that all parties involved agree to the terms and conditions stated in the Letter of Credit.

4. Sign the document: Once all parties agree to the terms, both parties should sign the document, and each should keep a copy.

5. Witness the signatures: To avoid any future disputes, both parties may wish to have their signatures witnessed.

6. Keep a record of the agreement: If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.

In conclusion, this Standby Letter of Credit (SBLC) document is an important tool to ensure trust and payment for deals, particularly in international trading. By following the above steps, both parties can ensure a smooth and secure transaction.