Why in foreign trade (Banking), Letter of Credit is considered safe for exporter vs. bank contract? Why?

simply in a Contract the Bank has no liability, while in L.C the Bank is bound with the agreement untill the retirement of L.C.

L/C raised as per UCPDC600 series are all IRREVOCABLE . The Issuing bank undertakes to pay the beneficiary o( Exporter ) once the shipping documents are complied with the L/C terms .

In case the Exporter has any doubt with the credit worthiness of the Lc issuance bank they can seek for CONFIRMED  lc where the2nd Bank verifies the authenticity of the Issuance bank on the credit worthiness of the bank . This confirmatory bank ( is a bank of repute in UK/ USA )  

I believe there is no subject as BANK CONTRACT , Buyer and Seller can have signed  COMMERCIAL contract between them  clarifying the PAYMENT TERMS  and proceed for shipment of trust and claim legal compensation in case of any breach of contract for non payment or non compliance 

because we cant belive anybody.

payment is secured subject to complying documents

The Letter of Credit is the safest method of Sattalement of International Trade, the Expoerter export the goods to inporter and submit the Shipping and other required paper to his Bank, the expoerter bank sed the document to Inporter bank, from where the Importer make the Letter of credit payment and obtain the document to Take the delivery of the goods from Shipping Co. or authority.

A letter of credit (L/C) satisfies the needs of both the seller and the buyer.Mostly, in international trade the seller and buyer dont know well each other  and may end up in trade disaster if any party fails to peform the obligations. A seller may be worried that after dispatching the goods the buyer may not pay and a buyer may be worried that after payment the goods may not reach as promised.To avoid all such risks L/C is a safe method, As if doucuments are all correct then the seller gets the payment and the buyer will be satisfied that goods will reach as required.Apart from this L/C doesnot deal in physical goods, if the goods are of different nature, size,color etc., then L/C cannot address this issue. So, a buyer should mention all the doucuments in L/C, which will enable him to receive goods exactly as required.All these flexibility is not available in a bank contract.So, L/C is the most safest in international business.

Bank involves as bigger guranter in there