1. The Laws of New York
  2. Consolidated Laws
  3. Uniform Commercial Code
  4. Article 5: Letters of Credit


Section 5-102 Definitions

Uniform Commercial Code (UCC)

Section 5--102. Definitions.

  (a) In this article:

   (1) "Adviser" means a person who, at the request of the issuer, a

   confirmer, or another adviser, notifies or requests another

   adviser to notify the beneficiary that a letter of credit has

   been issued, confirmed, or amended.

   (2) "Applicant" means a person at whose request or for whose

   account a letter of credit is issued. The term includes a

   person who requests an issuer to issue a letter of credit on

   behalf of another if the person making the request undertakes

   an obligation to reimburse the issuer.

   (3) "Beneficiary" means a person who under the terms of a letter

   of credit is entitled to have its complying presentation

   honored. The term includes a person to whom drawing rights

   have been transferred under a transferable letter of credit.

   (4) "Confirmer" means a nominated person who undertakes, at the

   request or with the consent of the issuer, to honor a

   presentation under a letter of credit issued by another.

   (5) "Dishonor" of a letter of credit means failure to timely

   honor or to take an interim action, such as acceptance of a

   draft, that may be required by the letter of credit.

   (6) "Document" means a draft or other demand, document of title,

   investment security, certificate, invoice, or other record,

   statement, or representation of fact, law, right, or opinion:

   (i) which is presented in a written or other medium permitted

   by the letter of credit or, unless prohibited by the

   letter of credit, by the standard practice referred to in

   subsection (e) of section 5--108; and

   (ii) which is capable of being examined for compliance with

   the terms and conditions of the letter of credit. A

   document may not be oral.

   (7) "Good faith" means honesty in fact in the conduct or

   transaction concerned.

   (8) "Honor" of a letter of credit means performance of the

   issuer's undertaking in the letter of credit to pay or

   deliver an item of value. Unless the letter of credit

   otherwise provides, "honor" occurs:

   (i) upon payment,

   (ii) if the letter of credit provides for acceptance, upon

   acceptance of a draft and, at maturity, its payment, or

   (iii) if the letter of credit provides for incurring a deferred

   obligation, upon incurring the obligation and, at

   maturity, its performance.

   (9) "Issuer" means a bank or other person that issues a letter of

   credit, but does not include an individual who makes an

   engagement for personal, family, or household purposes.

   (10) "Letter of credit" means a definite undertaking that

   satisfies the requirements of section 5--104 by an issuer to

   a beneficiary at the request or for the account of an

   applicant or, in the case of a financial institution, to

   itself or for its own account, to honor a documentary

   presentation by payment or delivery of an item of value.

   (11) "Nominated person" means a person whom the issuer:

   (i) designates or authorizes to pay, accept, negotiate, or

   otherwise give value under a letter of credit, and

   (ii) undertakes by agreement or custom and practice to

   reimburse.

   (12) "Presentation" means delivery of a document to an issuer or

   nominated person for honor or giving of value under a letter

   of credit.

   (13) "Presenter" means a person making a presentation as or on

   behalf of a beneficiary or nominated person.

   (14) "Record" means information that is inscribed on a tangible

   medium, or that is stored in an electronic or other medium

   and is retrievable in perceivable form.

   (15) "Successor of a beneficiary" means a person who succeeds to

   substantially all of the rights of a beneficiary by operation

   of law, including a corporation with or into which the

   beneficiary has been merged or consolidated, an

   administrator, executor, personal representative, trustee in

   bankruptcy, debtor in possession, liquidator, and receiver.

  (b) Definitions in other articles applying to this article and the sections in which they appear are:

   "Accept" or "acceptance" Section 3--410

   "Value" Sections 3--303, 4--209.

  (c) Article 1 contains certain additional general definitions and principles of construction and interpretation applicable throughout this article.