Assignment task:
You are a fabric wholesaler of silk. Your company, Fabric4U is located in Toronto. You are looking to purchase and import Silk from a producer in China, Silk123. You have never done business with Silk123, so both parties have agreed to a letter of credit to settle payment for this transaction.
Question 1: What needs to be included in the contract between Fabric4U and Silk123 to allow for this transaction to be settled by letter of credit? Be specific and apply the requirements to this scenario.
Question 2: Let's assume the silk will be transported from China to Canada by sea. What should the exporter do to protect the goods? How and why?