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355.5-111 Remedies.
(1)
(2)
(3)
(4)
(5)
(6)
If an issuer wrongfully dishonors or repudiates its obligation to pay money under a
letter of credit before presentation, the beneficiary, successor, or nominated person
presenting on its own behalf may recover from the issuer the amount that is the
subject of the dishonor or repudiation. If the issuer's obligation under the letter of
credit is not for the payment of money, the claimant may obtain specific
performance or, at the claimant's election, recover an amount equal to the value of
performance from the issuer. In either case, the claimant may also recover incidental
but not consequential damages. The claimant is not obligated to take action to avoid
damages that might be due from the issuer under this subsection. If, although not
obligated to do so, the claimant avoids damages, the claimant's recovery from the
issuer must be reduced by the amount of damages avoided. The issuer has the
burden of proving the amount of damages avoided. In the case of repudiation the
claimant need not present any document.
If an issuer wrongfully dishonors a draft or demand presented under a letter of credit
or honors a draft or demand in breach of its obligation to the applicant, the applicant
may recover damages resulting from the breach, including incidental but not
consequential damages, less any amount saved as a result of the breach.
If an adviser or nominated person other than a confirmer breaches an obligation
under this article or an issuer breaches an obligation not covered in subsection (1) or
(2) of this section, a person to whom the obligation is owed may recover damages
resulting from the breach, including incidental but not consequential damages, less
any amount saved as a result of the breach. To the extent of the confirmation, a
confirmer has the liability of an issuer specified in this subsection and subsections
(1) and (2) of this section.
An issuer, nominated person, or adviser who is found liable under subsection (1),
(2), or (3) of this section shall pay interest on the amount owed thereunder from the
date of wrongful dishonor or other appropriate date.
Reasonable attorney's fees and other expenses of litigation must be awarded to the
prevailing party in an action in which a remedy is sought under this article.
Damages that would otherwise be payable by a party for breach of an obligation
under this article may be liquidated by agreement or undertaking, but only in an
amount or by a formula that is reasonable in light of the harm anticipated.
Effective: July 1, 2001
History: Repealed and reenacted, 2000 Ky. Acts ch. 408, sec. 11, effective July 14,
2001. -- Created 1958 Ky. Acts ch. 77, sec. 5-111, effective July 1, 1960.
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