Soft clauses may makeLetter of Creditit lose its irrevocability, or make it impossible for the seller to perform the letter of credit, and are usually used to shift market risks. To avoid such problems, it should be ensured that the seller can control the issuance of all documents and that the buyer cannot take delivery of the goods before payment.

Soft clauses are terms in international trade, generally referring to trap clauses that may threaten the interests of the seller.
By setting soft clauses, the buyer may make the letter of credit lose its irrevocability, or make it impossible for the seller to perform the letter of credit, usually to shift market risks.
A letter of credit with soft clauses may have a negative impact on the seller. For example, the seller may not be able to complete the delivery within the specified time, resulting in the buyers right to refuse payment.

The key to identifying soft clauses is to ensure that the buyer cannot take delivery of the goods before obtaining the documents by paying, and that the issuance of all documents is under the control of the seller or an official institution.
For identified soft clauses, the seller should argue on a reasonable basis or adopt flexible means to get the customer to cancel these clauses. For example, the clause original bill of lading is directly delivered to the customer can be changed to copy bill of lading is delivered to the customer, allowing the customer to take delivery of the goods in advance, but it must be guaranteed through the bank.

For some large buyers, there may be soft clauses in their letters of credit. The seller needs to make a choice according to the specific situation, but should always be vigilant.
When the customer chooses to settle by letter of credit, the seller needs to carefully review the letter of credit terms to ensure that there are no problematic clauses.
If there are objections, the letter of credit can be returned to the bank for modification; if there are no objections, the letter of credit can be accepted and fulfilled on time.
The link of reviewing the letter of credit is very important, requiring the seller to have solid knowledge of letters of credit and a cautious attitude.