400.5-109. (a) If a presentation is made that appears on its facestrictly to comply with the terms and conditions of the letter of credit,but a required document is forged or materially fraudulent or honor of thepresentation would facilitate a material fraud by the beneficiary on theissuer or applicant:
(1) The issuer shall honor the presentation, if honor is demanded by:
(i) A nominated person who has given value in good faith and withoutnotice of forgery or material fraud;
(ii) A confirmer who has honored its confirmation in good faith;
(iii) A holder in due course of a draft drawn under the letter ofcredit which was taken after acceptance by the issuer or nominated person;or
(iv) An assignee of the issuer's or nominated person's deferredobligation that was taken for value and without notice of forgery ormaterial fraud after the obligation was incurred by the issuer or nominatedperson; and
(2) The issuer, acting in good faith, may honor or dishonor thepresentation in any other case.
(b) If an applicant claims that a required document is forged ormaterially fraudulent or that honor of the presentation would facilitate amaterial fraud by the beneficiary on the issuer or applicant, a court ofcompetent jurisdiction may temporarily or permanently enjoin the issuerfrom honoring a presentation or grant similar relief against the issuer orother persons only if the court finds that:
(1) The relief is not prohibited under the law applicable to anaccepted draft or deferred obligation incurred by the issuer;
(2) A beneficiary, issuer or nominated person who may be adverselyaffected is adequately protected against loss that it may suffer becausethe relief is granted;
(3) All of the conditions to entitle a person to the relief under thelaw of this state have been met; and
(4) On the basis of the information submitted to the court, theapplicant is more likely than not to succeed under its claim of forgery ormaterial fraud and the person demanding honor does not qualify forprotection under subsection (a)(1).
(L. 1963 p. 503 § 5-109, A.L. 1997 S.B. 6)
*No continuity with § 400.5-109 as repealed by L. 1997 S.B. 6 § A.
400.5-109. (a) If a presentation is made that appears on its facestrictly to comply with the terms and conditions of the letter of credit,but a required document is forged or materially fraudulent or honor of thepresentation would facilitate a material fraud by the beneficiary on theissuer or applicant:
(1) The issuer shall honor the presentation, if honor is demanded by:
(i) A nominated person who has given value in good faith and withoutnotice of forgery or material fraud;
(ii) A confirmer who has honored its confirmation in good faith;
(iii) A holder in due course of a draft drawn under the letter ofcredit which was taken after acceptance by the issuer or nominated person;or
(iv) An assignee of the issuer's or nominated person's deferredobligation that was taken for value and without notice of forgery ormaterial fraud after the obligation was incurred by the issuer or nominatedperson; and
(2) The issuer, acting in good faith, may honor or dishonor thepresentation in any other case.
(b) If an applicant claims that a required document is forged ormaterially fraudulent or that honor of the presentation would facilitate amaterial fraud by the beneficiary on the issuer or applicant, a court ofcompetent jurisdiction may temporarily or permanently enjoin the issuerfrom honoring a presentation or grant similar relief against the issuer orother persons only if the court finds that:
(1) The relief is not prohibited under the law applicable to anaccepted draft or deferred obligation incurred by the issuer;
(2) A beneficiary, issuer or nominated person who may be adverselyaffected is adequately protected against loss that it may suffer becausethe relief is granted;
(3) All of the conditions to entitle a person to the relief under thelaw of this state have been met; and
(4) On the basis of the information submitted to the court, theapplicant is more likely than not to succeed under its claim of forgery ormaterial fraud and the person demanding honor does not qualify forprotection under subsection (a)(1).
(L. 1963 p. 503 § 5-109, A.L. 1997 S.B. 6)
*No continuity with § 400.5-109 as repealed by L. 1997 S.B. 6 § A.
400.5-109. (a) If a presentation is made that appears on its facestrictly to comply with the terms and conditions of the letter of credit,but a required document is forged or materially fraudulent or honor of thepresentation would facilitate a material fraud by the beneficiary on theissuer or applicant:
(1) The issuer shall honor the presentation, if honor is demanded by:
(i) A nominated person who has given value in good faith and withoutnotice of forgery or material fraud;
(ii) A confirmer who has honored its confirmation in good faith;
(iii) A holder in due course of a draft drawn under the letter ofcredit which was taken after acceptance by the issuer or nominated person;or
(iv) An assignee of the issuer's or nominated person's deferredobligation that was taken for value and without notice of forgery ormaterial fraud after the obligation was incurred by the issuer or nominatedperson; and
(2) The issuer, acting in good faith, may honor or dishonor thepresentation in any other case.
(b) If an applicant claims that a required document is forged ormaterially fraudulent or that honor of the presentation would facilitate amaterial fraud by the beneficiary on the issuer or applicant, a court ofcompetent jurisdiction may temporarily or permanently enjoin the issuerfrom honoring a presentation or grant similar relief against the issuer orother persons only if the court finds that:
(1) The relief is not prohibited under the law applicable to anaccepted draft or deferred obligation incurred by the issuer;
(2) A beneficiary, issuer or nominated person who may be adverselyaffected is adequately protected against loss that it may suffer becausethe relief is granted;
(3) All of the conditions to entitle a person to the relief under thelaw of this state have been met; and
(4) On the basis of the information submitted to the court, theapplicant is more likely than not to succeed under its claim of forgery ormaterial fraud and the person demanding honor does not qualify forprotection under subsection (a)(1).
(L. 1963 p. 503 § 5-109, A.L. 1997 S.B. 6)
*No continuity with § 400.5-109 as repealed by L. 1997 S.B. 6 § A.
