(a) Except as otherwise provided in Alaska Stat. § 45.05.109, an issuer shall honor a presentation that, as determined by the standard practice referred to in (e) of this section, appears on its face to comply strictly with the terms and conditions of the letter of credit. Except as otherwise provided in Alaska Stat. § 45.05.113 and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear so to comply.
Terms Used In Alaska Statutes 45.05.108
Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
Contract: A legal written agreement that becomes binding when signed.
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Forgery: The fraudulent signing or alteration of another's name to an instrument such as a deed, mortgage, or check. The intent of the forgery is to deceive or defraud. Source: OCC
Fraud: Intentional deception resulting in injury to another.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
(b) An issuer has a reasonable time after presentation, but not beyond the end of the seventh business day of the issuer after the day of the issuer’s receipt of documents,
(1) to honor the presentation;(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 (d) of this section, an issuer is precluded from asserting a discrepancy as a basis for dishonor if
(1) timely notice is not given; or(2) the discrepancy is not stated in the notice, if timely notice is given.(d) Failure to give the notice specified in (b) of this section 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 Alaska Stat. § 45.05.109(a) or expiration of the letter of credit before presentation.(e) An issuer shall observe the standard practice of financial institutions that regularly issue letters of credit. A determination of the issuer’s observance of the standard practice is a matter of interpretation for a court. A court shall offer the parties a reasonable opportunity to present evidence of the standard practice.(f) An issuer is not responsible for
(1) the performance or nonperformance of the underlying contract, arrangement, or transaction;(2) an act or omission of others; or(3) observance or knowledge of the usage of a particular trade, other than the standard practice referred to in (e) of this section.(g) If an undertaking constituting a letter of credit under Alaska Stat. § 45.05.102(a)(10) contains nondocumentary conditions, an issuer shall disregard the nondocumentary conditions and treat them as if they were not stated.(h) An issuer that dishonors a presentation shall return the documents or hold them at the disposal of, and send advice to that effect to, the presenter.(i) An issuer that honors a presentation as permitted or required by this chapter
(1) is entitled to be reimbursed by the applicant in immediately available funds not later than the date of the payment of funds;(2) takes the documents free of claims of the beneficiary or presenter;(3) is precluded from asserting a right of recourse on a draft under Alaska Stat. § 45.03.414 – 45.03.415;(4) except as otherwise provided in Alaska Stat. § 45.05.110 and 45.05.117, 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(5) is discharged to the extent of the issuer’s performance under the letter of credit unless the issuer honored a presentation in which a required signature of a beneficiary was forged.
