2005 Connecticut Code - Sec. 42a-5-109. Fraud and forgery.
Sec. 42a-5-109. Fraud and forgery. (a) If a presentation is made that appears on
its face strictly to comply with the terms and conditions of the letter of credit, but a
required document is forged or materially fraudulent, or honor of the presentation would
facilitate a material fraud by the beneficiary on the issuer or applicant: (1) The issuer
shall honor the presentation, if honor is demanded by (i) a nominated person who has
given value in good faith and without notice of forgery or material fraud, (ii) a confirmer
who has honored its confirmation in good faith, (iii) a holder in due course of a draft
drawn under the letter of credit which was taken after acceptance by the issuer or nominated person, or (iv) an assignee of the issuer's or nominated person's deferred obligation
that was taken for value and without notice of forgery or material fraud after the obligation was incurred by the issuer or nominated person; and (2) the issuer, acting in good
faith, may honor or dishonor the presentation in any other case.
(1959, P.A. 133, S. 5-109; P.A. 96-198, S. 9.)
History: P.A. 96-198 entirely replaced former provisions re the obligation of the issuer to its customer with provisions re the honoring of a presentation when there is fraud or forgery, in part a restatement of Sec. 42a-5-114(2), revised to 1995, and the standards for the issuance of injunctive or other relief.
See Sec. 42a-5-108 for successor provisions to Sec. 42a-5-109, revised to 1995, re issuer's obligation to its customer.
Cited. 173 C. 492, 498, 501. Cited. 203 C. 394, 398.
Former Subsec. (2):
Cited. 203 C. 394, 398.
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