§ 41-05-02 — (5-102) Definitions

North Dakota § 41-05-02

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-05: Letters of Credit

Text

1. In this chapter:
a. "Adviser" means a person who, at the request of the issuer, a confirmer, or
another adviser, notifies or requests another adviser to notify the beneficiary that
a letter of credit has been issued, confirmed, or amended.
b. "Applicant" means a person at whose request or for whose account a letter of
credit is issued. The term includes a person who requests an issuer to issue a
letter of credit on behalf of another if the person making the request undertakes
an obligation to reimburse the issuer.
c. "Beneficiary" means a person who under the terms of a letter of credit is entitled
to have its complying presentation honored. The term includes a person to whom
drawing rights have been transferred under a transferable letter of credit.
d. "Confirmer" means a nominated person who undertakes, at the request or with
the consent of the issuer, to honor a presentation under a letter of credit issued
by another.
e. "Dishonor" of a letter of credit means failure timely to honor or to take an interim
action, such as acceptance of a draft, that may be required by the letter of credit.
f. "Document" means a draft or other demand, document of title, investment
security, certificate, invoice, or other record, statement, or representation of fact,
law, right, or opinion:
(1) Which is presented in a written or other medium permitted by the letter of
credit or, unless prohibited by the letter of credit, by the standard practice
referred to in subsection 1 of section 41-05-08; and
(2) Which is capable of being examined for compliance with the terms and
conditions of the letter of credit. A document may not be oral.
g. "Good faith" means honesty in fact in the conduct or transaction concerned. The
definition of "good faith" in section 41-01-09 does not apply to this chapter.
h. "Honor" of a letter of credit means performance of the issuer's undertaking in the
letter of credit to pay or deliver an item of value. Unless the letter of credit
otherwise provides, "honor" occurs:
(1) Upon payment;
(2) If the letter of credit provides for acceptance, upon acceptance of a draft
and, at maturity, its payment; or
(3) If the letter of credit provides for incurring a deferred obligation, upon
incurring the obligation and, at maturity, its performance.
i. "Issuer" means a bank or other person that issues a letter of credit, but does not
include an individual who makes an engagement for personal, family, or
household purposes.
j. "Letter of credit" means a definite undertaking that satisfies the requirements of
section 41-05-04 by an issuer to a beneficiary at the request or for the account of
an applicant or, in the case of a financial institution, to itself or for its own account,
to honor a documentary presentation by payment or delivery of an item of value.
k. "Nominated person" means a person whom the issuer:
(1) Designates or authorizes to pay, accept, negotiate, or otherwise give value
under a letter of credit; and
(2) Undertakes by agreement or custom and practice to reimburse.
l. "Presentation" means delivery of a document to an issuer or nominated person
for honor or giving of value under a letter of credit.

m. "Presenter" means a person making a presentation as or on behalf of a
beneficiary or nominated person.
n. "Record" means information that is inscribed on a tangible medium, or that is
stored in an electronic or other medium and is retrievable in perceivable form.
o. "Successor of a beneficiary" means a person who succeeds to substantially all of
the rights of a beneficiary by operation of law, including a corporation with or into
which the beneficiary has been merged or consolidated, an administrator,
executor, personal representative, trustee in bankruptcy, debtor in possession,
liquidator, and receiver.
2. Definitions in other chapters applying to this chapter and the sections in which they
appear are:
a. "Accept" or "acceptance". Section 41-03-46.
b. "Value". Sections 41-03-29 and 41-04-23.
3. Chapter 41-01 contains certain additional general definitions and principles of
construction and interpretation applicable throughout this chapter.