§ 6A-5-108 Issuer's rights andobligations. – (a) Except as otherwise provided in § 6A-5-109, an issuer shall honor apresentation that, as determined by the standard practice referred to insubsection (e), appears on its face strictly to comply with the terms andconditions of the letter of credit. Except as otherwise provided in §6A-5-113 and unless otherwise agreed with the applicant, an issuer shalldishonor a presentation that does not appear so to comply.
(b) An issuer has a reasonable time after presentation, butnot beyond the end of the seventh (7th) business day of the issuer after theday of its receipt of documents:
(1) To honor;
(2) If the letter of credit provides for honor to becompleted more than seven (7) business days after presentation, to accept adraft or incur a deferred obligation; or
(3) To give notice to the presenter of discrepancies in thepresentation.
(c) Except as otherwise provided in subsection (d), an issueris precluded from asserting as a basis for dishonor any discrepancy if timelynotice is not given, or any discrepancy not stated in the notice if timelynotice is given.
(d) Failure to give the notice specified in subsection (b) orto mention fraud, forgery, or expiration in the notice does not preclude theissuer from asserting as a basis for dishonor fraud or forgery as described in§ 6A-5-109(a) or expiration of the letter of credit before presentation.
(e) An issuer shall observe standard practice of financialinstitutions that regularly issue letters of credit. Determination of theissuer's observance of the standard practice is a matter of interpretation forthe court. The court shall offer the parties a reasonable opportunity topresent evidence of the standard practice.
(f) An issuer is not responsible for:
(1) The performance or nonperformance of the underlyingcontract, arrangement, or transaction;
(2) An act or omission of others; or
(3) Observance or knowledge of the usage of a particulartrade other than the standard practice referred to in subsection (e).
(g) If an undertaking constituting a letter of credit under§ 6A-5-102(a)(10) contains nondocumentary conditions, an issuer shalldisregard the nondocumentary conditions and treat them as if they were notstated.
(h) An issuer that has dishonored a presentation shall returnthe documents or hold them at the disposal of, and send advice to that effectto, the presenter.
(i) An issuer that has honored a presentation as permitted orrequired by this chapter:
(1) Is entitled to be reimbursed by the applicant inimmediately available funds not later than the date of its payment of funds;
(2) Takes the documents free of claims of the beneficiary orpresenter;
(3) Is precluded from asserting a right of recourse on adraft under §§ 6A-3-413 and 6A-3-414;
(4) Except as otherwise provided in §§ 6A-5-110 and6A-5-117, is precluded from restitution of money paid or other value given bymistake to the extent the mistake concerns discrepancies in the documents ortender which are apparent on the face of the presentation; and
(5) Is discharged to the extent of its performance under theletter of credit unless the issuer honored a presentation in which a requiredsignature of a beneficiary was forged.
§ 6A-5-108 Issuer's rights andobligations. – (a) Except as otherwise provided in § 6A-5-109, an issuer shall honor apresentation that, as determined by the standard practice referred to insubsection (e), appears on its face strictly to comply with the terms andconditions of the letter of credit. Except as otherwise provided in §6A-5-113 and unless otherwise agreed with the applicant, an issuer shalldishonor a presentation that does not appear so to comply.
(b) An issuer has a reasonable time after presentation, butnot beyond the end of the seventh (7th) business day of the issuer after theday of its receipt of documents:
(1) To honor;
(2) If the letter of credit provides for honor to becompleted more than seven (7) business days after presentation, to accept adraft or incur a deferred obligation; or
(3) To give notice to the presenter of discrepancies in thepresentation.
(c) Except as otherwise provided in subsection (d), an issueris precluded from asserting as a basis for dishonor any discrepancy if timelynotice is not given, or any discrepancy not stated in the notice if timelynotice is given.
(d) Failure to give the notice specified in subsection (b) orto mention fraud, forgery, or expiration in the notice does not preclude theissuer from asserting as a basis for dishonor fraud or forgery as described in§ 6A-5-109(a) or expiration of the letter of credit before presentation.
(e) An issuer shall observe standard practice of financialinstitutions that regularly issue letters of credit. Determination of theissuer's observance of the standard practice is a matter of interpretation forthe court. The court shall offer the parties a reasonable opportunity topresent evidence of the standard practice.
(f) An issuer is not responsible for:
(1) The performance or nonperformance of the underlyingcontract, arrangement, or transaction;
(2) An act or omission of others; or
(3) Observance or knowledge of the usage of a particulartrade other than the standard practice referred to in subsection (e).
(g) If an undertaking constituting a letter of credit under§ 6A-5-102(a)(10) contains nondocumentary conditions, an issuer shalldisregard the nondocumentary conditions and treat them as if they were notstated.
(h) An issuer that has dishonored a presentation shall returnthe documents or hold them at the disposal of, and send advice to that effectto, the presenter.
(i) An issuer that has honored a presentation as permitted orrequired by this chapter:
(1) Is entitled to be reimbursed by the applicant inimmediately available funds not later than the date of its payment of funds;
(2) Takes the documents free of claims of the beneficiary orpresenter;
(3) Is precluded from asserting a right of recourse on adraft under §§ 6A-3-413 and 6A-3-414;
(4) Except as otherwise provided in §§ 6A-5-110 and6A-5-117, is precluded from restitution of money paid or other value given bymistake to the extent the mistake concerns discrepancies in the documents ortender which are apparent on the face of the presentation; and
(5) Is discharged to the extent of its performance under theletter of credit unless the issuer honored a presentation in which a requiredsignature of a beneficiary was forged.
§ 6A-5-108 Issuer's rights andobligations. – (a) Except as otherwise provided in § 6A-5-109, an issuer shall honor apresentation that, as determined by the standard practice referred to insubsection (e), appears on its face strictly to comply with the terms andconditions of the letter of credit. Except as otherwise provided in §6A-5-113 and unless otherwise agreed with the applicant, an issuer shalldishonor a presentation that does not appear so to comply.
(b) An issuer has a reasonable time after presentation, butnot beyond the end of the seventh (7th) business day of the issuer after theday of its receipt of documents:
(1) To honor;
(2) If the letter of credit provides for honor to becompleted more than seven (7) business days after presentation, to accept adraft or incur a deferred obligation; or
(3) To give notice to the presenter of discrepancies in thepresentation.
(c) Except as otherwise provided in subsection (d), an issueris precluded from asserting as a basis for dishonor any discrepancy if timelynotice is not given, or any discrepancy not stated in the notice if timelynotice is given.
(d) Failure to give the notice specified in subsection (b) orto mention fraud, forgery, or expiration in the notice does not preclude theissuer from asserting as a basis for dishonor fraud or forgery as described in§ 6A-5-109(a) or expiration of the letter of credit before presentation.
(e) An issuer shall observe standard practice of financialinstitutions that regularly issue letters of credit. Determination of theissuer's observance of the standard practice is a matter of interpretation forthe court. The court shall offer the parties a reasonable opportunity topresent evidence of the standard practice.
(f) An issuer is not responsible for:
(1) The performance or nonperformance of the underlyingcontract, arrangement, or transaction;
(2) An act or omission of others; or
(3) Observance or knowledge of the usage of a particulartrade other than the standard practice referred to in subsection (e).
(g) If an undertaking constituting a letter of credit under§ 6A-5-102(a)(10) contains nondocumentary conditions, an issuer shalldisregard the nondocumentary conditions and treat them as if they were notstated.
(h) An issuer that has dishonored a presentation shall returnthe documents or hold them at the disposal of, and send advice to that effectto, the presenter.
(i) An issuer that has honored a presentation as permitted orrequired by this chapter:
(1) Is entitled to be reimbursed by the applicant inimmediately available funds not later than the date of its payment of funds;
(2) Takes the documents free of claims of the beneficiary orpresenter;
(3) Is precluded from asserting a right of recourse on adraft under §§ 6A-3-413 and 6A-3-414;
(4) Except as otherwise provided in §§ 6A-5-110 and6A-5-117, is precluded from restitution of money paid or other value given bymistake to the extent the mistake concerns discrepancies in the documents ortender which are apparent on the face of the presentation; and
(5) Is discharged to the extent of its performance under theletter of credit unless the issuer honored a presentation in which a requiredsignature of a beneficiary was forged.
