2023 New York Laws › UCC - Uniform Commercial Code › Article 5 - Letters of Credit › 5-108 - Issuer's Rights and Obligations.

Section 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)  of  this section, 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 issue 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) of this section, 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) of this
section 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 subsection (a) of section 5--109  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.
(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) of this section.
(g) If an undertaking constituting a letter of credit under  paragraph
(10)  of  subsection  (a)  of  section  5--102  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.