405.108 Issuer’s rights and obligations.

292 words·~1 min read·/wi/chapter-405/405-108-2

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)Except as otherwise provided in s. 405.109 , an issuer shall honor a presentation that, as determined by the standard practice referred to in sub.

(5), appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as otherwise provided in s. 405.113 and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear so to comply.

(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, to do any of the following:

(a)To honor.

(b)If the letter of credit provides for honor to be completed more than 7 business days after presentation, to accept a draft or incur a deferred obligation.

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

(3)Except as otherwise provided in sub.

(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.

(4)Failure to give the notice specified in sub.

(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 s. 405.109

(1)or expiration of the letter of credit before presentation.

(5)An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Determination 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.