Michigan Laws 440.5103 – Letters of credit; scope of article
Current as of: 2024 | Check for updates
|
Other versions
Terms Used In Michigan Laws 440.5103
- Applicant: means a person at whose request or for whose account a letter of credit is issued. See Michigan Laws 440.5102
- 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
- Beneficiary: means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. See Michigan Laws 440.5102
- Contract: A legal written agreement that becomes binding when signed.
- 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. See Michigan Laws 440.5102
- Letter of credit: means a definite undertaking that satisfies the requirements of section 5104 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. See Michigan Laws 440.5102
- Nominated person: means both of the following:
(i) A person whom the issuer designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit. See Michigan Laws 440.5102Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity. See Michigan Laws 440.1201 Term: means a portion of an agreement that relates to a particular matter. See Michigan Laws 440.1201
(1) This article applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.
(2) The statement of a rule in this article does not by itself require, imply, or negate application of the same or a different rule to a situation not provided for, or to a person not specified, in this article.
(3) With the exception of this subsection, subsections (1) and (4), sections 5102(1)(i) and (j), 5106(4), and 5114(4), and except to the extent prohibited in section 1302 and 5117(4), the effect of this article may be varied by agreement or by a provision stated or incorporated by reference in an undertaking. A term in an agreement or undertaking generally excusing liability or generally limiting remedies for failure to perform obligations is not sufficient to vary obligations prescribed by this article.
(4) Rights and obligations of an issuer to a beneficiary or a nominated person under a letter of credit are independent of the existence, performance, or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies it, including contracts or arrangements between the issuer and the applicant and between the applicant and the beneficiary.