Chapter 1. Meet This Book

• §1.01 If You Read No Further …
• §1.02 The Third Edition: For Whom and What's New
• §1.03 Letters of Credit: A Thumbnail History
• §1.04 Risks of Letters of Credit: Tough Times Checklist
• §1.05 Letters of Credit vis-à-vis Contracts
• §1.06 “The Program”: Terminology in This Book

Chapter 2. Definitions and Distinctions

• §2.01 Definitions About Letters of Credit Quibbler's Corner—What's in a Name?
• §2.02 Commercial Letters of Credit
• §2.03 Drafts and Banker's Acceptances
• §2.04 Standby Letters of Credit
• §2.05 Use of Definitions
• §2.06 The Independence Principle
• §2.07 Distinctions from Other Instruments
• §2.08 International Demand Guarantees
• §2.09 Documentary Collection
• §2.10 “Standard Banking Practice”
• §2.11 Trade Finance Alternatives

Chapter 3. Nomenclature for Credits

• §3.01 Introduction
• §3.02 Acceptance Credit
• §3.03 Advised Credit and Specially Advised Credit
• §3.04 Back-to-Back Credit
• §3.05 Circular Credit and Circular Negotiation Credit
• §3.06 Clean Credit
• §3.07 Commercial Letter of Credit
• §3.08 Confirmed Credit
• §3.09 Counter Credit
• §3.10 Deferred Payment or Deferred Sight Credit
• §3.10A Direct Pay Credit
• §3.11 Documentary Credit
• §3.12 Domestic Credit
• §3.13 Financial Guarantee-Type Standby Letter of Credit
• §3.14 Firm Credit
• §3.15 Foreign, Export-Import, or Transit Credit
• §3.16 Inoperative Credit
• §3.17 Irrevocable Credit
• §3.18 Negotiation and Nomination: Discussion
• §3.19 Negotiation Credit
• §3.20 Notation Credit
• §3.21 Open or General Credit
• §3.22 Partial Performance Credit
• §3.23 Performance-Based Standby Letter of Credit
• §3.24 Postoperative Credit
• §3.25 Preadvised Credit
• §3.26 Preoperative Credit
• §3.27 Red Clause or Anticipatory Credit
• §3.28 Reimbursement Credit
• §3.29 Revocable Credit
• §3.30 Revolving Credit
• §3.31 Sight or Payment Credit
• §3.32 Silent Confirmation
• §3.33 Simple Credit
• §3.34 Straight Credit
• §3.35 Teletransmission Credit
• §3.36 Third-Party Credits
• §3.37 Transferable Credit
• §3.38 Two-Party Credit
• §3.39 Usance Credit

Chapter 4. Article 5 of The Uniform Commercial Code

• §4.01 UCC: Introduction
• §4.02 UCC: Fundamentals of a Letter of Credit
• §4.03 UCC: Adviser's Obligations, §5-107(c)
• §4.04 UCC: Issuer's Obligations, §5-108
• §4.05 UCC: Confirmer's Obligations, §5-107(a)
• §4.06 UCC: Nominated Person's Obligations
• §4.07 UCC: Disclaimers of Obligations, §§5-103(c)and 5-111(e)
• §4.08 UCC: Beneficiary's Warranties, §5-110(1)
• §4.09UCC: Fraud and Prehonor Relief from Fraud, §5-109
• §4.10 UCC: Posthonor Litigation
• §4.11 The Intersection of UCC Article 5 and UCC Article 9

Chapter 5. Uniform Customs and Practice for Documentary Credits (UCP 500)

• §5.01 UCP: What It Is and How It Applies; Article 1
• §5.02 UCP: Fundamentals; Articles 2–6
• §5.03 UCP: Notifications; Articles 7–12
• §5.04 UCP: Examination of Documents; Article 13—Standards for Examination of Documents
• §5.05 UCP: Notice of Dishonor; Article 14—Discrepant Documents and Notice
• §5.06 UCP: Examination Notice and Preclusion: UCP 500 vis-à-vis UCC Article 5 and the New ISP
• §5.07 UCP: Disclaimers; Articles 15–19
• §5.08 UCP: Documents; Articles 20–22
• §5.09 UCP: Expiry; Articles 42–45
• §5.10 UCP: Transferable Credit; Article 48
• §5.11 UCP: Assignment of Proceeds; Article 49
• §5.12 eUCP
• §5.13 International Standard Banking Practice (ISBP)
• §5.14 ICC Rules for Bank-to-Bank Reimbursements

Chapter 5A. UCP 600

• §5A.01 UCP 600
• §5A.02 UCP 600, General Provisions and Definitions, Articles 1–6
• §5A.03 Bank Undertakings and Notifications, Articles 7–16
• §5A.04 Original Documents, Article 17
• §5A.05 Extension of Expiry Last Date or Last Day for Presentation, Article 29
• §5A.06 Tolerance in Credit Amount, Quantity, and Unit Prices, Article 30
• §5A.07 Partial Drawings or Shipments, Article 31
• §5A.08 Installment Drawings or Shipments, Article 32
• §5A.09 Hours of Presentation, Article 33
• §5A.10 Disclaimer on Effectiveness of Documents, Article 34
• §5A.11 Disclaimer on Transmission and Translation, Article 35
• §5A.12 Force Majeure, Article 36
• §5A.13 Disclaimer for Acts of an Instructed Party, Article 37
• §5A.14 Transferable Credits, Article 38
• §5A.15 Assignment of Proceeds, Article 39

Chapter 6. The International Standby Practices 1998 (ISP98)

• §6.01 Introduction
• §6.02 Rule 1, General Provisions
• §6.03 Rule 2, Obligations
• §6.04 Rule 3, Presentation
• §6.05 Rule 4, Examination
• §6.06 Rule 5, Notice, Preclusion, and Disposition of Documents
• §6.07 Rule 6, Transfer, Assignment, and Transfer by Operation of Law
• §6.08 Rules 7 through 10, Miscellaneous Provisions
• §6.09 Standby User Checklist for ISP98
• §6.10 Conclusion

Chapter 7. Rules and Governmental Actions

• §7.01 Introduction
• §7.02 Legal Proceedings and Principles
• §7.03 Governmental Actions
• §7.04 UNCITRAL, URDG, and Other Rules
• §7.05 Arbitration and Letters of Credit

Chapter 8. Fraud and Injunctions

• §8.01 Overview
• §8.02 Old Colony Trust and Sztejn Cases
• §8.03 OldUCC Article5 Ambiguities
• §8.04 RevisedUCC Article 5 and Fraud
• §8.05 Illegality—Enron and the Mahonia Case

Chapter 9. Insolvency

• §9.01 Introduction
• §9.02 Terminology
• §9.03 Pertinent Provisions of the Bankruptcy Code
• §9.04 Letters of Credit and Bankruptcy
• §9.05 Letters of Credit: State Insolvency; Status of Foreign Insolvency Proceedings in U.S. Bankruptcy Court
• §9.06 Conclusion

Chapter 10. Subrogation, Setoff, and Marshaling

• §10.01 What Is Subrogation?
• §10.02 Subrogation and Letters of Credit: Examples Before Revised UCC Article 5
• §10.03 Subrogation Under UCC Revised Article 5
• §10.04 Subrogation and Letters of Credit: Bankruptcy Code
• §10.05 Setoff Under the Bankruptcy Code
• §10.06 Doctrine of Marshaling

Chapter 11. Basic Mechanics

• §11.01 The Players
• §11.02 How Letters of Credit Are Issued
• §11.03 Applicant; Examples
• §11.04 Issuer; Examples
• §11.05 Confirming Bank; Examples
• §11.06 Advising Bank; Examples
• §11.07 Nominated Bank; Examples
• §11.08 Beneficiary; Examples
• §11.09 Amending a Letter of Credit
• §11.10 How to Present for Payment
• §11.11 Expiry; Examples
• §11.12 Fees
• §11.13 Transmission of Data and Money
• §11.14 Electronic Issuance and Presentation
• §11.15 Internal Controls

Chapter 12. Reimbursement Agreements Annotated

• §12.01 Reimbursement Agreements
• §12.02 Examination of Documents: Bifurcated Standard
• §12.03 Waiving Liability of Issuer, Revised UCC Article §5-103(c)
• §12.04 Reimbursement Provisions
• §12.05 Choice of Rules—UCP or ISP? Exclusions to ISP Rules
• §12.06 Introduction to Annotated Forms
• §12.07 Commercial LOC Reimbursement and Security Agreement, with Annotations
• §12.08 Commercial LOC Application and Reimbursement Agreement, with Annotations
• §12.09 Reimbursement Agreement for Standby LOC Subject to the ISP
• §12.10 Unsecured Continuing Standby LOC Reimbursement Agreement: Good Example

Chapter 13. Standby Letters of Credit: Anatomy of Sample Forms

• §13.01 Using Chapters 13 and 14 Together
• §13.02 Clean LOC, Not an LOC, Standby LOC: Comparisons
• §13.03 Standby LOC: Application Form
• §13.04 Exclusions from UCP 500 and ISP98
• §13.05 Basic Form: Standby LOC
• §13.06 Extend Expiry or Pay for Evergreen Contracts
• §13.07 Standby LOC Form: Separately Confirmed Credit
• §13.08 Standby LOC Form: Amendment
• §13.09 Draft or Demand for Payment
• §13.10 Standby LOC Presentation Documents
• §13.11 Transfer Request for Standby LOC
• §13.12 Standby LOC Form: Assignment of Proceeds
• §13.13 Standby LOC Form: Release of Credit or Reduction of Amounts Available
• §13.14 Standby LOC Form: ForceMajeure Extending Expiry
• §13.15 Examples of Standby Credit Forms

Chapter 14. Standby Letters of Credit: Language and Procedures

• §14.01 Reconciling Contracts with Credits
• §14.02 Contract for Sale to Be Secured by Standby Letter of Credit
• §14.03 Issuer's Engagement to Pay
• §14.04 Nondocumentary, Extrinsic Conditions
• §14.05 Discrepancies: Standby LOC Examples
• §14.06 Use of the Word “Purported”
• §14.07 Drafts and Payment Demands
• §14.08 Statements of Nonperformance and Other Documents

Chapter 15. Illustrative Transactions

• §15.01 Illustrative Transactions: In General
• §15.02 Accounts Payable
• §15.03 Appeal and Supersedeas Bonds
• §15.04 Arbitration: Security for Award
• §15.05 Bid, Performance, and Advance Payment Security
• §15.06 Credit Rating Enhancement of Debt Securities
• §15.07 Installment Payments and Sales
• §15.08 Lease Rentals; Sale and Leaseback
• §15.09 Limited Partnerships, Installment Contributions
• §15.10 Loan Collateral
• §15.11 Oil Industry
• §15.12 Postcontract Addition of Security; Form
• §15.13 Promissory Notes
• §15.14 Reinsurance
• §15.15 Trade Accounts Receivable
• §15.16 United States Government Contracts and Transactions
• §15.17 State Contracts and Transactions
• §15.18 Real Estate Transactions
• §15.19 International Crisis Resolution Using a Standby LOC
• §15.20 Miscellaneous Uses of Standby Letters of Credit

Chapter 16. Forms, Procedures, and Checklists

• §16.01 Using Chapters 16 and 17 Together
• §16.02 ICC Standard Documentary Credit Forms
• §16.03 Commercial LOC Application Form
• §16.04 Basic Form: Commercial LOC
• §16.05 Commercial Letters of Credit in Action
• §16.06 Discrepant Documents and Waivers
• §16.07 Transfers, with Forms
• §16.08 Assignment of Proceeds: Form
• §16.09 Applicant's Checklist for LOCs
• §16.10 Beneficiary'sChecklist for LOCs
• §16.11 Administrative Procedures

Chapter 17. Commercial Letters of Credit: Presentation Documents

• §17.01 Introduction: Purposes and Scope of Chapter
• §17.02 Transport Documents: Definitions
• §17.03 UCP Transport Documents
• §17.04 UCP: Insurance Documents
• §17.05 UCP: Commercial Invoices and Other Documents; Articles 37–38
• §17.06 UCP 500: Allowances, Partial and Installment Shipments/Drawings; Articles 39–41
• §17.07 UCP 500's Words of Art: Articles 39, 46–47
• §17.08 UCC Article 7: Bills of Lading Provisions
• §17.09 Presentation Documents: Cases Illustrating Deficiencies

Chapter 18. Paying the Beneficiary: The Fundamental Principles of Letter of Credit Transactions

• §18.01 Paying the Beneficiary
• §18.02 Strict Compliance
• §18.03 Timely Presentation
• §18.04 Measuring Compliance
• §18.05 The Preclusion Rule
• §18.06 The Independence Principle
• §18.07 Fraud
• §18.08 Warranties and Other Postpayment Rights and Obligations
• §18.09 Conclusion

Table of Cases

Index