Oregon Statutes 75.1080 – Issuers rights and obligations
(1) Except as provided in ORS § 75.1090, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (5) of this section, appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as provided in ORS § 75.1130 and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear to comply with the terms and conditions of the letter of credit.
Terms Used In Oregon Statutes 75.1080
- Applicant: includes a person who requests that an issuer issue a letter of credit on behalf of another if the person making the request undertakes an obligation to reimburse the issuer. See Oregon Statutes 75.1020
- 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: includes a person to whom drawing rights have been transferred under a transferable letter of credit. See Oregon Statutes 75.1020
- 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.
- 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 Oregon Statutes 75.1020
- Letter of credit: means a definite undertaking that satisfies the requirements of ORS § 75. See Oregon Statutes 75.1020
- 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.
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Presentation: means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit. See Oregon Statutes 75.1020
- Presenter: means a person making a presentation as or on behalf of a beneficiary or nominated person. See Oregon Statutes 75.1020
- 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.
(2) An issuer has a reasonable time after presentation, but not later than the seventh business day after the issuer receives the documents:
(a) To honor;
(b) 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
(c) To give notice to the presenter of discrepancies in the presentation.
(3) Except as otherwise provided in subsection (4) of this section, an issuer is precluded from asserting as a basis for dishonor:
(a) Any discrepancy if timely notice is not given; or
(b) Any discrepancy not stated in the notice if timely notice is given.
(4) Failure to give the notice specified in subsection (2) 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 ORS § 75.1090 (1) or expiration of the letter of credit before presentation.
(5) An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Determination of the issuer’s observance of the standard practice is a matter of interpretation for the court. The court shall offer the parties a reasonable opportunity to present evidence of the standard practice.
(6) An issuer is not responsible for:
(a) The performance or nonperformance of the underlying contract, arrangement, or transaction;
(b) An act or omission of another person; or
(c) Observance or knowledge of the usage of a particular trade other than the standard practice referred to in subsection (5) of this section.
(7) If an undertaking constituting a letter of credit under ORS § 75.1020 (1)(j) contains nondocumentary conditions, an issuer shall disregard the nondocumentary conditions and treat them as if they were not stated.
(8) An issuer that has dishonored a presentation shall return the documents or hold them at the disposal of, and send advice to that effect to, the presenter.
(9) An issuer that has honored a presentation as permitted or required by this chapter:
(a) Is entitled to be reimbursed by the applicant in immediately available funds not later than the date of its payment of funds;
(b) Takes the documents free of claims of the beneficiary or presenter;
(c) Is precluded from asserting a right of recourse on a draft under ORS § 73.0414 and 73.0415;
(d) Except as provided in ORS § 75.1100 and 75.1170, 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
(e) Is discharged to the extent of its performance under the letter of credit unless the issuer honored a presentation in which a required signature of a beneficiary was forged. [1961 c.726 § 75.1080; 1997 c.150 § 11]