MARVIN MANDEL, Governor                           209

or to enlarge or otherwise modify its terms.

5-106. Time and affect of establishment of credit.

(1) Unless otherwise agreed a credit is established

(a) As regards the customer as soon as a
letter of credit is sent to him or the letter of credit
or an authorized written advice of its issuance is sent
to the beneficiary: and

(b) As regards the beneficiary when be
receives a letter of credit or as authorized written
advise of its issuance.

(2) Unless otherwise agreed once an irrevocable
credit is established as regards the customer it can be
modified or revoked only with the consent of the customer
and once it is established as regards the beneficiary it
can be modified or revoked only with his consent.

(3) Unless otherwise agreed after a revocable
credit is established it may be modified or revoked by
the issuer without notice to or consent from the customer
or beneficiary.

(4) Notwithstanding any modification or revocation
of a revocable credit any person authorized to honor or
negotiate under the terms of the original credit is
entitled to reimbursement for or honor of any draft or
demand for payment duly honored or negotiated before
receipt of notice of the modification or revocation and
the issuer in turn is entitled to reimbursement from its
customer.

5—107. Advice of credit; confirmation; error in

statement of terms.

(1) Unless otherwise specified an advising bank by
advising a credit issued by another bank does not assume
any obligation to honor drafts drawn or demands for
payment made under the credit but it does assume
obligation for the accuracy of its own statement.

(2) A confirming bank by confirming a credit
becomes directly obligated on the credit to the extent of
its confirmation as though it were its issuer and
acquires the rights of an issuer.

      (3) Even though an advising bank incorrectly

advises the terms of a credit it has been authorized to

advise, the credit is established as against the issuer
to the extent of its original terms.