International Standby Practices-ISP98

ISP 98 was designed specifically as a stand-alone set of Rules for standby letters of credit. However, UCP is valid and still applies to standbys. Since ISP and UCP coexist and may be applicable to standbys by incorporation, applicant, beneficiaries, and issuers have a choice. ISP98 covers general rules for independent undertakings, recognizing that parties wishing to provide for payment of the purchase price against documents evidencing the sale and shipment of goods. It recognizes the critical distinction between undertakings that are “independent’ and ordinary promises and guarantees that are not. In performing various rules, ISP98 is advantaged by its focus on payment against all types of documents as distinguished from UCP’s focus on payment against documents evidencing the sale and shipment of goods.