810 ILCS 5/5-108
2021 Illinois Compiled Statutes|Chapter 810 - COMMERCIAL CODE|810 ILCS 5/ - Uniform Commercial Code.|Article 5 - Letters Of Credit

 (from Ch. 26, par. 5-108)Sec. 5-108.     Issuer's rights and obligations.(a) Except as otherwise provided in Section 5-109, an issuer shall  honor a presentation that, as determined by the standard practice referred to  in subsection (e), appears on its face strictly to comply with the terms and  conditions of the letter of credit.  Except as otherwise provided in Section  5-113 and unless otherwise agreed with the applicant, an issuer shall  dishonor a presentation that does not appear so to comply.(b) An issuer has a reasonable time after presentation, but not  beyond the end of the seventh business day of the issuer after the day of its  receipt of documents:(1) to honor,(2) if the letter of credit provides for honor to be     completed more than seven business days after presentation, to accept a draft or incur a deferred obligation, or(3) to give notice to the presenter of discrepancies     in the presentation.(c) Except as otherwise provided in subsection (d), an issuer is  precluded from asserting as a basis for dishonor any discrepancy if timely  notice is not given, or any discrepancy not stated in the notice if timely  notice is given.(d) Failure to give the notice specified in subsection (b) or to  mention fraud, forgery, or expiration in the notice does not preclude the  issuer from asserting as a basis for dishonor fraud or forgery as described in  Section 5-109(a) or expiration of the letter of credit before presentation.(e) An issuer shall observe standard practice of financial institutions  that regularly issue letters of credit.  Determination of the issuer's  observance of the standard practice is a matter of interpretation for the  court.  The court shall offer the parties a reasonable opportunity to present  evidence of the standard practice.(f) An issuer is not responsible for:(1) the performance or nonperformance of the     underlying contract, arrangement, or transaction,(2) an act or omission of others, or(3)  observance or knowledge of the usage of a     particular trade other than the standard practice referred to in subsection (e).(g) If an undertaking constituting a letter of credit under Section  5-102(a)(10) contains nondocumentary conditions, an issuer shall disregard  the nondocumentary conditions and treat them as if they were not stated.(h) An issuer that has dishonored a presentation shall return the  documents or hold them at the disposal of, and send advice to that effect to,  the presenter.(i) An issuer that has honored a presentation as permitted or  required by this Article:(1) is entitled to be reimbursed by the applicant in     immediately available funds not later than the date of its payment of funds;(2) takes the documents free of claims of the     beneficiary or presenter;(3) is precluded from asserting a right of recourse     on a draft under Sections 3-414 and 3-415;(4) except as otherwise provided in Sections 5-110     and 5-117, is precluded from restitution of money paid or other value given by mistake to the extent the mistake concerns discrepancies in the documents or tender which are apparent on the face of the presentation; and(5) is discharged to the extent of its performance     under the letter of credit unless the issuer honored a presentation in which a required signature of a beneficiary was forged.   (Source: P.A. 89-534, eff. 1-1-97.)