AB1036,10,4 (b) "Value", ss. 403.303 and 404.211

AB1036,10,6 (3) Chapter 401 contains certain additional general definitions and principles of construction and interpretation applicable throughout this chapter.

AB1036,10,8 405.103 Scope. (1) This chapter applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit.

AB1036,10,11 (2) The statement of a rule in this chapter does not by itself require, imply, or negate application of the same or a different rule to a situation not provided for, or to a person not specified, in this chapter.

AB1036,10,18 (3) With the exception of this subsection, subs. (1) and (4), ss. 405.102 (1) (i) and (j), 405.106 (4) and 405.114 (4), and except to the extent prohibited in ss. 401.102 (3) and 405.117 (4), the effect of this chapter may be varied by agreement or by a provision stated or incorporated by reference in an undertaking. A term in an agreement or undertaking generally excusing liability or generally limiting remedies for failure to perform obligations is not sufficient to vary obligations prescribed by this chapter.

AB1036,10,23 (4) Rights and obligations of an issuer to a beneficiary or a nominated person under a letter of credit are independent of the existence, performance, or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies it, including contracts or arrangements between the issuer and the applicant and between the applicant and the beneficiary.

AB1036,11,3 405.104 Formal requirements. A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a record and is authenticated by any of the following methods:

AB1036,11,4 (1) A signature.

AB1036,11,6 (2) In accordance with the agreement of the parties or the standard practice referred to in s. 405.108 (5).

AB1036,11,8 405.105 Consideration. Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation.

AB1036,11,12 405.106 Issuance, amendment, cancellation, and duration. (1) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides.

AB1036,11,17 (2) After a letter of credit is issued, rights and obligations of a beneficiary, applicant, confirmer, and issuer are not affected by an amendment or cancellation to which that person has not consented except to the extent the letter of credit provides that it is revocable or that the issuer may amend or cancel the letter of credit without that consent.

AB1036,11,20 (3) If there is no stated expiration date or other provision that determines its duration, a letter of credit expires one year after its stated date of issuance or, if none is stated, after the date on which it is issued.

AB1036,11,22 (4) A letter of credit that states that it is perpetual expires 5 years after its stated date of issuance, or if none is stated, after the date on which it is issued.

AB1036,12,2 405.107 Confirmer, nominated person, and adviser. (1) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant and the confirmer had issued the letter of credit at the request and for the account of the issuer.

AB1036,12,4 (2) A nominated person who is not a confirmer is not obligated to honor or otherwise give value for a presentation.

AB1036,12,11 (3) A person requested to advise may decline to act as an adviser. An adviser that is not a confirmer is not obligated to honor or give value for a presentation. An adviser undertakes to the issuer and to the beneficiary accurately to advise the terms of the letter of credit, confirmation, amendment, or advice received by that person and undertakes to the beneficiary to check the apparent authenticity of the request to advise. Even if the advice is inaccurate, the letter of credit, confirmation, or amendment is enforceable as issued.

AB1036,12,17 (4) A person who notifies a transferee beneficiary of the terms of a letter of credit, confirmation, amendment, or advice has the rights and obligations of an adviser under sub. (3). The terms in the notice to the transferee beneficiary may differ from the terms in any notice to the transferor beneficiary to the extent permitted by the letter of credit, confirmation, amendment, or advice received by the person who so notifies.

AB1036,12,23 405.108 Issuer's rights and obligations. (1) Except as otherwise provided in s. 405.109, an issuer shall honor a presentation that, as determined by the standard practice referred to in sub. (5), appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as otherwise provided in s. 405.113 and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear so to comply.

AB1036,13,3 (2) An issuer has a reasonable time after presentation, but not beyond the end of the 7th business day of the issuer after the day of its receipt of documents, to do any of the following:

AB1036,13,4 (a) To honor.

AB1036,13,6 (b) If the letter of credit provides for honor to be completed more than 7 business days after presentation, to accept a draft or incur a deferred obligation.

AB1036,13,7 (c) To give notice to the presenter of discrepancies in the presentation.

AB1036,13,10 (3) Except as otherwise provided in sub. (4), 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.

AB1036,13,14 (4) Failure to give the notice specified in sub. (2) 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 s. 405.109 (1) or expiration of the letter of credit before presentation.

AB1036,13,18 (5) An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Determination of the standard practice is a matter of interpretation for the court. The court shall offer the parties a reasonable opportunity to present evidence of the standard practice.

AB1036,13,19 (6) An issuer is not responsible for any of the following:

AB1036,13,21 (a) The performance or nonperformance of the underlying contract, arrangement, or transaction.

AB1036,13,22 (b) An act or omission of others.