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Abstract
The so-called silent confirmation is not a true confirmation (nor necessarily silent). Hence, neither the silent confirmer nor its client-beneficiary is able to rely upon the framework of law, custom and practice pertaining to conventional confirmations of a letter of credit. This fact and some of its legal significance specifically under US law was recognized and addressed for the first time by a US court in a recent decision by the Court of Appeals for the 11th Circuit in a case styled Dibrell Brothers International SA v. Banca Nazionale del Lavoro. Both parties must define their respective rights and obligations by means of a detailed contract, and neither is in a position to bind or otherwise affect any other party thereby. While there is reason for caution, the prospect of a growing demand for such silent confirmation undertakings and services makes it worthwhile nevertheless for financiers to work through the issues promptly. The drafting of a suitable agreement between silent confirmer and beneficiary is the key to successful use of this trade finance tool.