Source: https://law.lis.virginia.gov/vacodefull/title8.5A/
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Code of Virginia Code - Title 8.5A. Uniform Commercial Code -- Letters of Credit
Table of Contents » Title 8.5A. Uniform Commercial Code -- Letters of Credit
Title 8.5A. Uniform Commercial Code -- Letters of Credit
§ 8.5A-101. Short title.
This title may be cited as Uniform Commercial Code--Letters of Credit (1995).
§ 8.5A-102. Definitions.
(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 (i) 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 § 8.5A-108(e) and (ii) which is capable of being examined for compliance with the terms and conditions of the letter of credit. A document may not be oral.
(10) "Letter of credit" means a definite undertaking that satisfies the requirements of § 8.5A-104 by an issuer to a beneficiary at the request 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.
(b) Definitions in other titles applying to this title and the sections in which they appear are:
"Accept" or "Acceptance" -- § 8.3A-409.
"Value" -- §§ 8.3A-303 and 8.4A-211.
(c) Title 8.1A contains certain additional general definitions and principles of construction and interpretation applicable throughout this title.
1997, c. 343; 2003, c. 353.
§ 8.5A-103. Scope.
(a) This title applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.
(b) The statement of a rule in this title 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 title.
(c) With the exception of this subsection, subsections (a) and (d), §§ 8.5A-102(a) (9) and (10), 8.5A-106(d), and 8.5A-114(d), and except to the extent prohibited in §§ 8.1A-302 and 8.5A-117(d), the effect of this title 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 title.
§ 8.5A-104. Formal requirements.
A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a record and is authenticated (i) by a signature or (ii) in accordance with the agreement of the parties or the standard practice referred to in § 8.5A-108(e).
§ 8.5A-105. Consideration.
§ 8.5A-106. Issuance, amendment, cancellation, and duration.
§ 8.5A-109. Fraud and forgery.
(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).
§ 8.5A-110. Warranties.
(1) to the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind described in § 8.5A-109(a); and
(b) The warranties in subsection (a) are in addition to warranties arising under Titles 8.3A, 8.4, 8.7, and 8.8A because of the presentation or transfer of documents covered by any of those titles.
§ 8.5A-111. Remedies.
(a) 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.
(c) If an adviser or nominated person other than a confirmer breaches an obligation under this title or an issuer breaches an obligation not covered in subsection (a) or (b), 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 (a) and (b).
§ 8.5A-113. Transfer by operation of law.
(b) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection (e), an issuer shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard practice referred to in § 8.5A-108(e) or, in the absence of such a practice, compliance with other reasonable procedures sufficient to protect the issuer.
(d) Honor of a purported successor's apparently complying presentation under subsection (a) or (b) has the consequences specified in § 8.5A-108(i) even if the purported successor is not the successor of a beneficiary. Documents signed in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of the beneficiary are forged documents for the purposes of § 8.5A-109.
§ 8.5A-115. Statute of limitations.
An action to enforce a right or obligation arising under this title must be commenced within one year after the expiration date of the relevant letter of credit or one year after the cause of action accrues, whichever occurs later. A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach.
§ 8.5A-116. Choice of law and forum.
(a) The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the manner provided in § 8.5A-104 or by a provision in the person's letter of credit, confirmation, or other undertaking. The jurisdiction whose law is chosen need not bear any relation to the transaction.
(c) Except as otherwise provided in this subsection, the liability of an issuer, nominated person, or adviser is governed by any rules of custom or practice, such as the Uniform Customs and Practice for Documentary Credits, to which the letter of credit, confirmation, or other undertaking is expressly made subject. If (i) this title would govern the liability of an issuer, nominated person, or adviser under subsection (a) or (b), (ii) the relevant undertaking incorporates rules of custom or practice, and (iii) there is conflict between this title and those rules as applied to that undertaking, those rules govern except to the extent of any conflict with the nonvariable provisions specified in § 8.5A-103(c).
(d) If there is conflict between this title and Titles 8.3A, 8.4, 8.4A, or 8.9A, this title governs.
(e) The forum for settling disputes arising out of an undertaking within this title may be chosen in the manner and with the binding effect that governing law may be chosen in accordance with subsection (a).
§ 8.5A-117. Subrogation of issuer, applicant, and nominated person.
(d) Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in subsections (a) and (b) do not arise until the issuer honors the letter of credit or otherwise pays, and the rights in subsection (c) do not arise until the nominated person pays or otherwise gives value. Until then, the issuer, nominated person, and the applicant do not derive under this section present or prospective rights forming the basis of a claim, defense, or excuse.
§ 8.5A-117.1. Security interest of issuer or nominated person.
(b) So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the value given with respect to a security interest in a document under subsection (a), the security interest continues and is subject to Title 8.9A, but:
(1) a security agreement is not necessary to make the security interest enforceable under subdivision (b) (3) of § 8.9A-203;
2000, c. 1007.
§ 8.5A-118. Applicability.
This title applies to a letter of credit that is issued on or after January 1, 1998. This title does not apply to a transaction, event, obligation, or duty arising out of or associated with a letter of credit that was issued before January 1, 1998. A transaction arising out of or associated with a letter of credit that was issued before January 1, 1998, and the rights, obligations, and interests flowing from that transaction are governed by Title 8.5 as it was effective on December 31, 1997, as if repeal or amendment had not occurred and may be terminated, completed, consummated, or enforced under that statute.