Scope

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

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 subsections (a), (b), and (d) of this Code section, paragraphs (9) and (10) of subsection (a) of Code Section 11-5-102, subsection (d) of Code Section 11-5-106, and subsection (d) of Code Section 11-5-114 and except to the extent prohibited in Code Section 11-1-302 and subsection (d) of Code Section 11-5-117, 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.

(Code 1981, §11-5-103, enacted by Ga. L. 2002, p. 995, § 1; Ga. L. 2015, p. 996, § 3B-16/SB 65.)

The 2015 amendment, effective January 1, 2016, substituted "in Code Section 11-1-302" for "in subsection (3) of Code Section 11-1-102" in the first sentence of subsection (c).

Editor's notes.

- Ga. L. 2015, p. 996, § 1-1/SB 65, not codified by the General Assembly, provides: "(a) This Act shall be known and may be cited as the 'Debtor-Creditor Uniform Law Modernization Act of 2015.'

"(b) To promote consistency among the states, it is the intent of the General Assembly to modernize certain existing uniform laws promulgated by the Uniform Law Commission affecting debtor and creditor rights, responsibilities, and relationships and other federally recognized laws affecting such rights, responsibilities, and relationships."

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.

Court managed expansion of former Article 5 principles.

- Former O.C.G.A. § 11-5-102(3) expressly contemplates court-managed expansion of principles contained in former Article 5. Barclays Bank v. Mercantile Nat'l Bank, 481 F.2d 1224 (5th Cir. 1973), cert. dismissed, 414 U.S. 1139, 94 S. Ct. 888, 39 L. Ed. 2d 96, (1974).

Bank confirmation of nonbank credit.

- The fact that former O.C.G.A. § 11-5-103(1)(f) 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).

Failure to give timely notice of dishonor.

- The issuing bank's failure to give timely notice of dishonor was not excused by the fact that the beneficiary later admitted it could not have produced the documents in question, no matter how much time it was given. Pro-Fab, Inc. v. Vipa, Inc., 772 F.2d 847 (11th Cir. 1985).

Cited in Bank S. v. Roswell Jeep Eagle, Inc., 204 Ga. App. 432, 419 S.E.2d 522 (1992).

RESEARCH REFERENCES

Am. Jur. 2d.

- 11 Am. Jur. 2d, Bills and Notes, § 337 et seq. 50 Am. Jur. 2d, Letters of Credit, and Credit Cards, §§ 19, 72, 73.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 5-103.

ALR.

- Variance between description of goods in letter of credit and documents accompanying draft as affecting duty to accept draft, 30 A.L.R. 353; 8 A.L.R.5th 463.

Construction of provision for extension in letter of credit or guaranty for purchase price of goods, 45 A.L.R. 1393.

Construction and effect of UCC Art. 5, dealing with letters of credit, 35 A.L.R.3d 1404.

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.

Download our app to see the most-to-date content.