Definitions

  1. Law
  2. Georgia Code
  3. Commercial Code
  4. Letters of Credit
  5. Definitions

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  1. As used in this article, the term:
    1. "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.
    2. "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.
    3. "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.
    4. "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.
    5. "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.
    6. "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 (e) of Code Section 11-5-108; 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.
    7. "Good faith" means honesty in fact in the conduct or transaction.
    8. "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 provides otherwise, "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.
    9. "Issuer" means a bank, entity, 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.
    10. "Letter of credit" means a definite undertaking that satisfies the requirements of Code Section 11-5-104 by an issuer to a beneficiary at the request of 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.
    11. "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.
    12. "Presentation" means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit.
    13. "Presenter" means a person making a presentation as or on behalf of a beneficiary or nominated person.
    14. "Record" means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.
    15. "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 a beneficiary has merged or consolidated, an administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator, and receiver.
  2. Other definitions applying to this article and the Code sections in which they appear are:

    "Accept" or "acceptance." Code Section 11-3-409.

    "Value." Code Section 11-3-303 and 11-4-211.

  3. Article 1 of this title contains general definitions and principles of construction and interpretation applicable throughout this article.

(Code 1981, §11-5-102, enacted by Ga. L. 2002, p. 995, § 1.)

Cross references.

- Requirement to satisfy definition of issuer, § 10-3-6.

JUDICIAL DECISIONS

Editor's notes.

- In light of the similarity of the provisions, decisions under former Article 5 are included in the annotations for this Code section.

Bank confirmation of nonbank credit.

- The fact that former O.C.G.A. § 11-5-103(1)(f) of this section provides a definition for a confirming bank with regard to letters of credit issued by a bank does not preclude existence of bank confirmation of a nonbank credit. Barclays Bank D.C.O. v. Mercantile Nat'l Bank, 339 F. Supp. 457 (N.D. Ga. 1972), aff'd, 481 F.2d 1224 (5th Cir. 1973), cert. dismissed, 414 U.S. 1139, 94 S. Ct. 888, 39 L. Ed. 2d 96 (1974).

Language precluding denial of purpose to act as a "confirming bank."

- See Barclays Bank D.C.O. v. Mercantile Nat'l Bank, 339 F. Supp. 457 (N.D. Ga. 1972), aff'd, 481 F.2d 1224 (5th Cir. 1973), cert. dismissed, 414 U.S. 1139, 94 S. Ct. 888, 39 L. Ed. 2d 96 (1974).

Cited in Benton v. Thacker, 257 Ga. 94, 355 S.E.2d 421 (1987); Dibrell Bros. Int'l v. Banca Nazionale Del Lavoro, 38 F.3d 1571 (11th Cir. 1994).

RESEARCH REFERENCES

Am. Jur. 2d.

- 50 Am. Jur. 2d, Letters of Credit, and Credit Cards, §§ 23, 32.

C.J.S.

- 82 C.J.S., Statutes, § 309.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 5-102.

ALR.

- What constitutes letter of credit, 30 A.L.R. 1310.

Modification, revocation, or reformation of letter of credit - modern cases, 13 A.L.R.5th 465.

Validity, construction, and application of the uniform customs and practice for documentary credits (UCP), 56 A.L.R.5th 565.


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