Standby letters of credit are documentary letters of credit as defined by UCP500. Standby letters of credit allow both buyer and seller to trade on an open account. It is effectively a document equivalent to a bank guarantee. A standby letter of credit is therefore not a payment instrument, unlike a traditional letter of credit, but a security instrument. The beneficiary assumes that payment will be made otherwise than by means of a standby letter of credit. The standby letter of credit shall only be used in the event that this is not the case. The typical document required under a standby letter of credit is a declaration by the beneficiary that a particular invoice has not been paid by the principal. Transport documents, packing slips, etc., i.e., documents that certify the execution of the delivery, would be considered as additional documents. A standby letter of credit is only entered into if the buyer defaults on its payment obligations. Standby letters of credit often perform the same function as a tender bond, performance bond, etc.