Texas Business & Commerce Code

§ 5.109 — FRAUD AND FORGERY

BC § 5.109Title 1. UNIFORM COMMERCIAL CODE · Ch. 5. LETTERS OF CREDIT

Statute text

(a)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:

(1)the issuer shall honor the presentation if honor is demanded by:

(A)a nominated person who has given value in good faith and without notice of forgery or material fraud;

(B)a confirmer who has honored its confirmation in good faith;

(C)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

(D)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

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Legislative history

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