Sec. 42a-5-111. Remedies.
Sec. 42a-5-111. 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
damages and, if appropriate under the circumstances, 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.
(b) If an issuer wrongfully dishonors a draft or demand presented under a letter of
credit or honors a draft or demand in breach of its obligation to the applicant, the applicant
may recover damages resulting from the breach, including incidental damages and, if
appropriate under the circumstances, consequential damages, less any amount saved as
a result of the breach.
(c) If an adviser or nominated person other than a confirmer breaches an obligation
under this article or an issuer breaches an obligation not covered in subsection (a) or
(b) of this section, 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) of
this section.
(d) An issuer, nominated person or adviser who is found liable under subsection
(a), (b) or (c) of this section shall pay interest on the amount owed thereunder from the
date of wrongful dishonor or other appropriate date.
(e) Reasonable attorney's fees and other expenses of litigation may be awarded to
the prevailing party in an action in which a remedy is sought under this article.
(f) Damages that would otherwise be payable by a party for breach of an obligation
under this article may be liquidated by agreement or undertaking, but only in an amount
or by a formula that is reasonable in light of the harm anticipated.
(1959, P.A. 133, S. 5-111; P.A. 96-198, S. 11.)
History: P.A. 96-198 entirely replaced former provisions re warranties of transfer and presentment with provisions re
remedies, in part a restatement of Sec. 42a-5-115, revised to 1995.
See Sec. 42a-5-110 for successor provisions to Sec. 42a-5-111, revised to 1995, re warranties.
Cited. 173 C. 492.