J. MILLARD TAWES, Governor                        875

Sub-title 5
Letters of Credit
5—101. Short Title.

This Sub-title shall be known and may be cited as Uniform Com-
mercial Code—Letters of Credit.

5—102. Scope.

(1)   This Sub-title applies

(a)  to a credit issued by a bank if the credit requires a docu-
mentary draft or a documentary demand for payment; and

(b)  to a credit issued by a person other than a bank if the credit
requires that the draft or demand for payment be accompanied by a
document of title; and

(c)  to a credit issued by a bank or other person if the credit is not
within subparagraphs (a) or (b) but conspicuously states that it is
a letter of credit or is conspicuously so entitled.

(2)   Unless the engagement meets the requirements of subsection
(1), this Sub-title does not apply to engagements to make advances
or to honor drafts or demands for payment, to authorities to pay or
purchase, to guarantees or to general agreements.

(3)   This Sub-title deals with some but not all of the rules and
concepts of letters of credit as such rules or concepts have developed
prior to this act or may hereafter develop. The fact that this Sub-
title states a rule does not by itself require, imply or negate applica-
tion of the same or a converse rule to a situation not provided for
or to a person not specified by this Sub-title.

5—103. Definitions.

(1) In this Sub-title unless the context otherwise requires

(a)  "Credit" or "letter of credit" means an engagement by a bank
or other person made at the request of a customer and of a kind
within the scope of this Sub-title (Section 5—102) that the issuer
will honor drafts or other demands for payment upon compliance
with the conditions specified in the credit. A credit may be either
revocable or irrevocable. The engagement may be either an agree-
ment to honor or a statement that the bank or other person is
authorized to honor.

(b)  A "documentary draft" or a "documentary demand for pay-
ment" is one honor of which is conditioned upon the presentation of
a document or documents. "Document" means any paper including
document of title, security, invoice, certificate, notice of default and
the like.

(c)  An "issuer" is a bank or other person issuing a credit.

(d)  A "beneficiary" of a credit is a person who is entitled under
its terms to draw or demand payment.

(e)  An "advising bank" is a bank which gives notification of the
issuance of a credit by another bank.