irrevocable letter of credit (L/C)

Firm commitment by an issuing bank to pay an accepting bank a specified sum in a specified currency, provided the conditions included in the L/C document are met within a specified timeframe. This L/C cannot be canceled (or its terms amended) without the seller's (beneficiary's) prior written approval, and comes usually as a confirmed irrevocable letter of credit. Also called irrevocable credit.