Assignability of letter of credit proceeds: adapting the code to new commercial practices

Article Abstract:

Uniform Commercial Code (UCC) Article 5-116(2) requires that letters of credit be assignable, and amending this provision would make the letter of credit more useful while preserving its flexibility and simplicity. This UCC provision was conceived when letters of credit were used mainly to finance sale of goods arrangements and is now outdated since the use of this vehicle has expanded to other areas of commerce. The rule's purpose is not to protect parties from unconscionable provisions, so amendment would pose no danger.

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Letters of credit under revised UCC Article 9

Article Abstract:

Revised UCC Article 9, which will primarily govern secured transactions, will also significantly affect letters of credit. The revisions may resolve the conflict that sometimes develops between letters of credit holders and credit holders in other secured transactions. The revised article established the concept of letter-of-credit rights and supporting obligations, including the right to payment or performance under a letter of credit regardless of whether the beneficiary may demand payment or performance.

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Litigating the letter of credit case - liability of banks under the current and revised Uniform Commercial Code

Article Abstract:

The author discusses UCC article 5, both current and revised, for determining bank liability in letter of credit cases.

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