§ 554.5111 — Remedies

Iowa § 554.5111

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

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.
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.
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.

4. An issuer, nominated person, or adviser who is found liable under subsection 1, 2, or
3 shall pay interest on the amount owed thereunder from the date of wrongful dishonor or
other appropriate date.
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.
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.

Legislative History

[C66, 71, 73, 75, 77, 79, 81, §554.5111]