Texas Business & Commerce Code

§ 5.108 — ISSUER'S RIGHTS AND OBLIGATIONS

BC § 5.108Title 1. UNIFORM COMMERCIAL CODE · Ch. 5. LETTERS OF CREDIT

Statute text

(a)Except as otherwise provided in Section 5.109, an issuer shall honor a presentation that, as determined by the standard practice referred to in Subsection (e), appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as otherwise provided in Section 5.113 and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear so to comply.

(b)An issuer has a reasonable time after presentation, but not beyond the end of the seventh business day of the issuer after the date of its receipt of documents:

(1)to honor;

(2)if the letter of credit provides for honor to be completed more than seven business days after presentation, to accept a draft or incur a deferred obligation; or

(3)to give notice to the presenter of discrepancies in the presentation.

(c)Except as otherwise provided in Subsection (d), 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.

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Legislative history

Amended by Acts 1999, 76th Leg., ch. 4, Sec. 1, eff. Sept. 1, 1999.