USA Statutes : maine
Title : Title 11. UNIFORM COMMERCIAL CODE
Chapter : Article 5-A. Letters of Credit (HEADING. PL 1997, c. 429, Pt. A, @2 (new))
Title 11 - §5-1101. Short title
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1101. Short title
This Article may be known and cited as the "Uniform Commercial Code -- Letters of Credit."
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1102. Definitions
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1102. Definitions
(1) As used in this Article, unless the context otherwise indicates, the following terms have the following meanings.
(a) "Adviser" means a person who, at the request of the issuer, a confirmer or another adviser, notifies or requests another
adviser to notify the beneficiary that a letter of credit has been issued, confirmed or amended.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) "Applicant" means a person at whose request or for whose account a letter of credit is issued. The term includes a person
who requests an issuer to issue a letter of credit on behalf of another if the person making the request undertakes an obligation
to reimburse the issuer.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(c) "Beneficiary" means a person who under the terms of a letter of credit is entitled to have its complying presentation honored.
The term includes a person to whom drawing rights have been transferred under a transferable letter of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(d) "Confirmer" means a nominated person who undertakes, at the request or with the consent of the issuer, to honor a presentation
under a letter of credit issued by another.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(e) "Dishonor" of a letter of credit means failure to timely honor or to take an interim action, such as acceptance of a draft,
that may be required by the letter of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(f) "Document" means a written draft or other demand, document of title, investment security, certificate, invoice or other
record, statement or representation of fact, law, right or opinion that:
(i) Is presented in a written or other medium permitted by the letter of credit or, unless prohibited by the letter of credit,
by the standard practice referred to in section 5-1108, subsection (5); and
(ii) Is capable of being examined for compliance with the terms and conditions of the letter of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(g) "Good faith" means honesty in fact in the conduct or transaction concerned.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(h) "Honor" of a letter of credit means performance of the issuer's undertaking in the letter of credit to pay or deliver an
item of value and unless otherwise provided occurs:
(i) Upon payment;
(ii) If the letter of credit provides for acceptance, upon acceptance of a draft and, at maturity, its payment; or
(iii) If the letter of credit provides for incurring a deferred obligation, upon incurring the obligation and, at maturity,
its performance.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(i) "Issuer" means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement
for personal, family or household purposes.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(j) "Letter of credit" means a definite undertaking that satisfies the requirements of section 5-1104 by an issuer to a beneficiary
at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account,
to honor a documentary presentation by payment or delivery of an item of value.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(k) "Nominated person" means a person whom the issuer:
(i) Designates or authorizes to pay, accept, negotiate or otherwise give value under a letter of credit; and
(ii) Undertakes by agreement or custom and practice to reimburse.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(l) "Presentation" means delivery of a document to an issuer or nominated person for honor or giving of value under a letter
of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(m) "Presenter" means a person making a presentation as or on behalf of a beneficiary or nominated person.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(n) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(o) "Successor of a beneficiary" means a person who succeeds to substantially all of the rights of a beneficiary by operation
of law, including a corporation with or into which the beneficiary has been merged or consolidated, an administrator, executor,
personal representative, trustee in bankruptcy, debtor in possession, liquidator and receiver.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) Definitions in other Articles applying to this Article and the sections in which they appear are:
div>
"Accept" or "Acceptance" section 3-1408
div>
"Value" sections 3-1303, 4-211-A.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) Article 1 contains certain additional general definitions and principles of construction and interpretation applicable throughout
this Article.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1103. Scope
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1103. Scope
(1) This Article applies to letters of credit and to certain rights and obligations arising out of transactions involving letters
of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) The statement of a rule in this Article does not by itself require, imply or negate application of the same or a different
rule to a situation not provided for, or to a person not specified, in this Article.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) With the exception of this subsection, subsections (1) and (4), section 5-1102, subsection (1), paragraphs (i) and (j),
section 5-1106, subsection (4), and section 5-1114, subsection (4), and except to the extent prohibited in section 1-102,
subsection (3) and section 5-1117, subsection (4), the effect of this Article may be varied by agreement or by a provision
stated or incorporated by reference in an undertaking. A term in an agreement or undertaking generally excusing liability
or generally limiting remedies for failure to perform obligations is not sufficient to vary obligations prescribed by this
Article.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) Rights and obligations of an issuer to a beneficiary or a nominated person under a letter of credit are independent of the
existence, performance or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies
it, including contracts or arrangements between the issuer and the applicant and between the applicant and the beneficiary.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1104. Formal requirements
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1104. Formal requirements
A letter of credit, confirmation, advice, transfer, amendment or cancellation may be issued in any form that is a record and
is authenticated by a signature or in accordance with the agreement of the parties or the standard practice referred to in
section 5-1108, subsection (5).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1105. Consideration
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1105. Consideration
Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or confirmation.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1106. Issuance, amendment, cancellation and duration
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1106. Issuance, amendment, cancellation and duration
(1) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or
otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it
so provides.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) After a letter of credit is issued, rights and obligations of a beneficiary, applicant, confirmer and issuer are not affected
by an amendment or cancellation to which that person has not consented except to the extent the letter of credit provides
that it is revocable or that the issuer may amend or cancel the letter of credit without that consent.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) If there is no stated expiration date or other provision that determines its duration, a letter of credit expires one year
after its stated date of issuance or, if none is stated, after the date on which it is issued.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) A letter of credit that states that it is perpetual expires 5 years after its stated date of issuance or, if none is stated,
after the date on which it is issued.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1107. Confirmer, nominated person and adviser
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1107. Confirmer, nominated person and adviser
(1) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of
its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant
and the confirmer had issued the letter of credit at the request and for the account of the issuer.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) A nominated person who is not a confirmer is not obligated to honor or otherwise give value for a presentation.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) A person requested to advise may decline to act as an adviser. An adviser that is not a confirmer is not obligated to honor
or give value for a presentation. An adviser undertakes to the issuer and to the beneficiary accurately to advise the terms
of the letter of credit, confirmation, amendment or advice received by that person and undertakes to the beneficiary to check
the apparent authenticity of the request to advise. Even if the advice is inaccurate, the letter of credit, confirmation
or amendment is enforceable as issued.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) A person who notifies a transferee beneficiary of the terms of a letter of credit, confirmation, amendment or advice has
the rights and obligations of an adviser under subsection (3). The terms in the notice to the transferee beneficiary may
differ from the terms in any notice to the transferor beneficiary to the extent permitted by the letter of credit, confirmation,
amendment or advice received by the person who so notifies.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1108. Issuer's rights and obligations
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1108. Issuer's rights and obligations
(1) Except as otherwise provided in section 5-1109, an issuer shall honor a presentation that, as determined by the standard
practice referred to in subsection (5), appears on its face strictly to comply with the terms and conditions of the letter
of credit. Except as otherwise provided in section 5-1113 and unless otherwise agreed with the applicant, an issuer shall
dishonor a presentation that does not appear to comply.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) An issuer has a reasonable time after presentation, but not beyond the end of the 7th business day of the issuer after the
day of its receipt of documents:
(a) To honor;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) To accept a draft or incur a deferred obligation, if the letter of credit provides for honor to be completed more than 7
business days after presentation; or
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(c) To give notice to the presenter of discrepancies in the presentation.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) Except as otherwise provided in subsection (4), an issuer is precluded from asserting as a basis for dishonor any discrepancy
if timely notice is not given, or any discrepancy not stated in the notice if timely notice is given.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) Failure to give the notice specified in subsection (2) or to mention fraud, forgery or expiration in the notice does not
preclude the issuer from asserting as a basis for dishonor, fraud or forgery as described in section 5-1109, subsection (1)
or expiration of the letter of credit before presentation.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(5) An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Determination
of the issuer's observance of the standard practice is a matter of interpretation for the court. The court shall offer the
parties a reasonable opportunity to present evidence of the standard practice.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(6) An issuer is not responsible for:
(a) The performance or nonperformance of the underlying contract, arrangement or transaction;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) An act or omission of others; or
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(c) Observance or knowledge of the usage of a particular trade other than the standard practice referred to in subsection (5).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(7) If an undertaking constituting a letter of credit under section 5-1102, subsection (1), paragraph (j) contains nondocumentary
conditions, an issuer shall disregard the nondocumentary conditions and treat them as if they were not stated.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(8) An issuer that has dishonored a presentation shall return the documents or hold them at the disposal of, and send advice
to that effect to, the presenter.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(9) An issuer that has honored a presentation as permitted or required by this Article:
(a) Is entitled to be reimbursed by the applicant in immediately available funds not later than the date of its payment of funds;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) Takes the documents free of claims of the beneficiary or presenter;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(c) Is precluded from asserting a right of recourse on a draft under sections 3-1414 and 3-1415;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(d) Except as otherwise provided in sections 5-1110 and 5-1117, is precluded from restitution of money paid or other value given
by mistake to the extent the mistake concerns discrepancies in the documents or tender that are apparent on the face of the
presentation; and
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(e) Is discharged to the extent of its performance under the letter of credit unless the issuer honored a presentation in which
a required signature of a beneficiary was forged.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1109. Fraud and forgery
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1109. Fraud and forgery
(1) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit,
but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material fraud
by the beneficiary on the issuer or applicant:
(a) The issuer shall honor the presentation, if honor is demanded by:
(i) A nominated person who has given value in good faith and without notice 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 of credit that was taken after acceptance by the issuer or
nominated person; or
(iv) An assignee of the issuer's or nominated person's deferred obligation that was taken for value and without notice of
forgery or material fraud after the obligation was incurred by the issuer or nominated person; and
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) The issuer, acting in good faith, may honor or dishonor the presentation in any other case.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) If an applicant claims that a required document is forged or materially fraudulent or that honor of the presentation would
facilitate a material fraud by the beneficiary on the issuer or applicant, a court of competent jurisdiction may temporarily
or permanently enjoin the issuer from honoring a presentation or grant similar relief against the issuer or other persons
only if the court finds that:
(a) The relief is not prohibited under the law applicable to an accepted draft or deferred obligation incurred by the issuer;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) A beneficiary, issuer or nominated person who may be adversely affected is adequately protected against loss that it may
suffer because the relief is granted;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(c) All of the conditions to entitle a person to the relief under the law of this State have been met; and
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(d) on the basis of the information submitted to the court, the applicant is more likely than not to succeed under its claim
of forgery or material fraud and the person demanding honor does not qualify for protection under subsection (1), paragraph
(a).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1110. Warranties
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1110. Warranties
(1) If its presentation is honored, the beneficiary warrants to:
(a) The issuer, any other person to whom presentation is made and the applicant that there is no fraud or forgery of the kind
described in section 5-1109, subsection (1); and
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) The applicant that the drawing does not violate any agreement between the applicant and beneficiary or any other agreement
intended by them to be augmented by the letter of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) The warranties in subsection (1) are in addition to warranties arising under Articles 3-A, 4, 7 and 8-A because of the presentation
or transfer of documents covered by any of those Articles.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1111. Remedies
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1111. Remedies
(1) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation,
the beneficiary, successor or nominated person presenting on its own behalf may recover from the issuer the amount that is
the subject of the dishonor or repudiation. If the issuer's obligation under the letter of credit is not for the payment
of money, the claimant may obtain specific performance or, at the claimant's election, recover an amount equal to the value
of performance from the issuer. In either case, the claimant may also recover incidental but not consequential damages.
The claimant is not obligated to take action to avoid damages that might be due from the issuer under this subsection. If,
although not obligated to do so, the claimant avoids damages, the claimant's recovery from the issuer must be reduced by the
amount of damages avoided. The issuer has the burden of proving the amount of damages avoided. In the case of repudiation,
the claimant need not present any document.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) If an issuer wrongfully dishonors a draft or demand presented under a letter of credit or honors a draft or demand in breach
of its obligation to the applicant, the applicant may recover damages resulting from the breach, including incidental but
not consequential damages, less any amount saved as a result of the breach.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) If an adviser or nominated person other than a confirmer breaches an obligation under this Article or an issuer breaches
an obligation not covered in subsection (1) or (2), a person to whom the obligation is owed may recover damages resulting
from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach. To
the extent of the confirmation, a confirmer has the liability of an issuer specified in this subsection and subsections (1)
and (2).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) An issuer, nominated person or adviser who is found liable under subsection (1), (2) or (3) shall pay interest on the amount
owed from the date of wrongful dishonor or other appropriate date.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(5) Reasonable attorney's fees and other expenses of litigation must be awarded to the prevailing party in an action in which
a remedy is sought under this Article.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(6) Damages that would otherwise be payable by a party for breach of an obligation under this Article may be liquidated by agreement
or undertaking, but only in an amount or by a formula that is reasonable in light of the harm anticipated.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1112. Transfer of letter of credit
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1112. Transfer of letter of credit
(1) Except as otherwise provided in section 5-1113, unless a letter of credit provides that it is transferable, the right of
a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) Even if a letter of credit provides that it is transferable, the issuer may refuse to recognize or carry out a transfer
if:
(a) the transfer would violate applicable law; or
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) the transferor or transferee has failed to comply with any requirement stated in the letter of credit or any other requirement
relating to transfer imposed by the issuer that is within the standard practice referred to in section 5-1108, subsection
(5) or is otherwise reasonable under the circumstances.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1113. Transfer by operation of law
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1113. Transfer by operation of law
(1) A successor of a beneficiary may consent to amendments, sign and present documents and receive payment or other items of
value in the name of the beneficiary without disclosing its status as a successor.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) A successor of a beneficiary may consent to amendments, sign and present documents and receive payment or other items of
value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection (5), an issuer
shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance
with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard
practice referred to in section 5-1108, subsection (5) or, in the absence of such a practice, compliance with other reasonable
procedures sufficient to protect the issuer.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) An issuer is not obliged to determine whether a purported successor is a successor of a beneficiary or whether the signature
of a purported successor is genuine or authorized.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) Honor of a purported successor's apparently complying presentation under subsection (1) or (2) has the consequences specified
in section 5-1108, subsection (9) even if the purported successor is not the successor of a beneficiary. Documents signed
in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of
the beneficiary are forged documents for the purposes of section 5-1109.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(5) An issuer whose rights of reimbursement are not covered by subsection (4) or substantially similar law and any confirmer
or nominated person may decline to recognize a presentation under subsection (2).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(6) A beneficiary whose name is changed after the issuance of a letter of credit has the same rights and obligations as a successor
of a beneficiary under this section.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1114. Assignment of proceeds
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1114. Assignment of proceeds
(1) In this section, "proceeds of a letter of credit" means the cash, check, accepted draft or other item of value paid or delivered
upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include
a beneficiary's drawing rights or documents presented by the beneficiary.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) A beneficiary may assign its right to part or all of the proceeds of a letter of credit. The beneficiary may do so before
presentation as a present assignment of its right to receive proceeds contingent upon its compliance with the terms and conditions
of the letter of credit.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the
assignment.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) An issuer or nominated person has no obligation to give or withhold its consent to an assignment of proceeds of a letter
of credit, but consent may not be unreasonably withheld if the assignee possesses and exhibits the letter of credit and presentation
of the letter of credit is a condition to honor.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(5) Rights of a transferee beneficiary or nominated person are independent of the beneficiary's assignment of the proceeds of
a letter of credit and are superior to the assignee's right to the proceeds.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(6) Neither the rights recognized by this section between an assignee and an issuer, transferee beneficiary or nominated person
nor the issuer's or nominated person's payment of proceeds to an assignee or a 3rd person affect the rights between the assignee
and any person other than the issuer, transferee beneficiary or nominated person. The mode of creating and perfecting a security
interest in or granting an assignment of a beneficiary's rights to proceeds is governed by Article 9 or other law. Against
persons other than the issuer, transferee beneficiary or nominated person, the rights and obligations arising upon the creation
of a security interest or other assignment of a beneficiary's right to proceeds and its perfection are governed by Article
9 or other law.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1115. Statute of limitations
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1115. Statute of limitations
An action to enforce a right or obligation arising under this Article must be commenced within one year after the expiration
date of the relevant letter of credit or one year after the claim for relief or cause of action accrues, whichever occurs
later. A claim for relief or cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of
knowledge of the breach.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1116. Choice of law and forum
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1116. Choice of law and forum
(1) The liability of an issuer, nominated person or adviser for action or omission is governed by the law of the jurisdiction
chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the manner provided
in section 5-1104 or by a provision in the person's letter of credit, confirmation or other undertaking. The jurisdiction
whose law is chosen need not bear any relation to the transaction.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) Unless subsection (1) applies, the liability of an issuer, nominated person or adviser for action or omission is governed
by the law of the jurisdiction in which the person is located. The person is considered to be located at the address indicated
in the person's undertaking. If more than one address is indicated, the person is considered to be located at the address
from which the person's undertaking was issued. For the purpose of jurisdiction, choice of law and recognition of interbranch
letters of credit, but not enforcement of a judgment, all branches of a bank are considered separate juridical entities and
a bank is considered to be located at the place where its relevant branch is considered to be located under this subsection.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) Except as otherwise provided in this subsection, the liability of an issuer, nominated person or adviser is governed by
any rules of custom or practice, such as the Uniform Customs and Practice for Documentary Credits, to which the letter of
credit, confirmation or other undertaking is expressly made subject. If this Article would govern the liability of an issuer,
nominated person, or adviser under subsection (1) or (2), the relevant undertaking incorporates rules of custom or practice
and there is conflict between this article and those rules as applied to that undertaking, those rules govern except to the
extent of any conflict with the nonvariable provisions specified in section 5-1103, subsection (3).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) If there is conflict between this Article and Article 3-A, 4, 4-A or 9, this Article governs.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(5) The forum for settling disputes arising out of an undertaking within this Article may be chosen in the manner and with the
binding effect that governing law may be chosen in accordance with subsection (1).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1117. Subrogation of issuer, applicant and nominated person
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1117. Subrogation of issuer, applicant and nominated person
(1) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as
if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same
extent as if the issuer were the secondary obligor of the underlying obligation owed to the applicant.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(2) An applicant that reimburses an issuer is subrogated to the rights of the issuer against any beneficiary, presenter or nominated
person to the same extent as if the applicant were the secondary obligor of the obligations owed to the issuer and has the
rights of subrogation of the issuer to the rights of the beneficiary stated in subsection (1).
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(3) A nominated person who pays or gives value against a draft or demand presented under a letter of credit is subrogated to
the rights of:
(a) The issuer against the applicant to the same extent as if the nominated person were a secondary obligor of the obligation
owed to the issuer by the applicant;
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(b) The beneficiary to the same extent as if the nominated person were a secondary obligor of the underlying obligation owed
to the beneficiary; and
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(c) The applicant to the same extent as if the nominated person were a secondary obligor of the underlying obligation owed to
the applicant.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
(4) Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in subsections (1) and (2) do not
arise until the issuer honors the letter of credit or otherwise pays and the rights in subsection (3) do not arise until the
nominated person pays or otherwise gives value. Until then, the issuer, nominated person, and the applicant do not derive
under this section present or prospective rights forming the basis of a claim, defense or excuse.
[1997, c. 429, Pt. A, §2 (new); §4 (aff).]
Section History:
PL 1997,
Ch. 429,
§A2
(NEW).
PL 1997,
Ch. 429,
§A4
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007Title 11 - §5-1118. Security interest of issuer or nominated person
Title 11: UNIFORM COMMERCIAL CODE
Article 5-A: Letters of Credit (HEADING: PL 1997, c. 429, Pt. A, @2 (new))
§5-1118. Security interest of issuer or nominated person
(1) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that
the issuer or nominated person honors or gives value for the presentation.
[1999, c. 699, Pt. B, §18 (new); §28 (aff).]
(2) So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the
value given with respect to a security interest in a document under subsection (1), the security interest continues and is
subject to Article 9-A, but:
(a) A security agreement is not necessary to make the security interest enforceable under section 9-1203, subsection (2), paragraph
(c);
[1999, c. 699, Pt. B, §18 (new); §28 (aff).]
(b) If the document is presented in a medium other than a written or other tangible medium, the security interest is perfected;
and
[1999, c. 699, Pt. B, §18 (new); §28 (aff).]
(c) If the document is presented in a written or other tangible medium and is not a certificated security, chattel paper, a
document of title, an instrument or a letter of credit, the security interest is perfected and has priority over a conflicting
security interest in the document so long as the debtor does not have possession of the document.
[1999, c. 699, Pt. B, §18 (new); §28 (aff).]
[1999, c. 699, Pt. B, §18 (new); §28 (aff).]
Section History:
PL 1999,
Ch. 699,
§B18
(NEW).
PL 1999,
Ch. 699,
§B28
(AFF).
The Revisor's Office cannot provide legal advice or
interpretation of Maine law to the public. If you need legal
advice, please consult
a qualified attorney.
Office of the Revisor of Statutes
7 State House Station
State House Room 108
Augusta, Maine 04333-0007
