§ 5-111 — Remedies

New York § 5-111

• Jurisdiction: New York
• Law UCC: Uniform Commercial Code
• Art. 5: Letters of Credit

Text

Section 5--111. Remedies.\n (a) If an issuer wrongfully dishonors or repudiates its obligation to\npay money under a letter of credit before presentation, the beneficiary,\nsuccessor, or nominated person presenting on its own behalf may recover\nfrom the issuer the amount that is the subject of the dishonor or\nrepudiation. If the issuer's obligation under the letter of credit is\nnot for the payment of money, the claimant may obtain specific\nperformance or, at the claimant's election, recover an amount equal to\nthe value of performance from the issuer. In either case, the claimant\nmay also recover incidental but not consequential damages. The claimant\nis not obligated to take action to avoid damages that might be due from\nthe issuer under this subsection. If, although not obligated to do so,\nthe claimant avoids damages, the claimant's recovery from the issuer\nmust be reduced by the amount of damages avoided. The issuer has the\nburden of proving the amount of damages avoided. In the case of\nrepudiation the claimant need not present any document.\n (b) If an issuer wrongfully dishonors a draft or demand presented\nunder a letter of credit or honors a draft or demand in breach of its\nobligation to the applicant, the applicant may recover damages resulting\nfrom the breach, including incidental but not consequential damages,\nless any amount saved as a result of the breach.\n (c) If an adviser or nominated person other than a confirmer breaches\nan obligation under this article or an issuer breaches an obligation not\ncovered in subsection (a) or (b) of this section, a person to whom the\nobligation is owed may recover damages resulting from the breach,\nincluding incidental but not consequential damages, less any amount\nsaved as a result of the breach. To the extent of the confirmation, a\nconfirmer has the liability of an issuer specified in this subsection\nand subsections (a) and (b) of this section.\n (d) An issuer, nominated person, or adviser who is found liable under\nsubsection (a), (b) or (c) of this section shall pay interest on the\namount owed thereunder from the date of wrongful dishonor or other\nappropriate date.\n (e) Damages that would otherwise be payable by a party for breach of\nan obligation under this article may be liquidated by agreement or\nundertaking, but only in an amount or by a formula that is reasonable in\nlight of the harm anticipated.\n