2010 Pennsylvania Code
Title 13 - COMMERCIAL CODE
Chapter 51 - Letters of Credit
5109 - Fraud and forgery.

     § 5109.  Fraud and forgery.
        (a)  Fraud and forgery generally.--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.
        (b)  Conditions for injunction.--If an applicant claims that
     a required document is forged or materially fraudulent or that
     honor of the presentation would facilitate a material fraud by
     the beneficiary on the issuer or applicant, a court of competent
     jurisdiction may temporarily or permanently enjoin the issuer
     from honoring a presentation or grant similar relief against the
     issuer or other persons only if the court finds that:
            (1)  the relief is not prohibited under the law
        applicable to an accepted draft or deferred obligation
        incurred by the issuer;
            (2)  a beneficiary, issuer or nominated person who may be
        adversely affected is adequately protected against loss that
        it may suffer because the relief is granted;
            (3)  all of the conditions to entitle a person to the
        relief under the law of this Commonwealth have been met; and
            (4)  on the basis of the information submitted to the
        court, the applicant is more likely than not to succeed under
        its claim of forgery or material fraud and the person
        demanding honor does not qualify for protection under
        subsection (a)(1).

        Special Provisions in Appendix.  See section 28 of Act 18 of
     2001 in the appendix to this title for special provisions
     relating to applicability of transitional provisions.
        Cross References.  Section 5109 is referred to in sections
     2512, 5108, 5110, 5113, 9700 of this title.