212

LAWS OF MARYLAND

[Ch. 49

(1)    A bank to which a documentary draft or demand
for payment is presented under a credit may without
dishonor of the draft, demand or credit

(a)    Defer honor until the close of the third
banking day following receipt of the documents; and

(b)   Further defer honor if the presenter has
expressly or impliedly consented thereto.

Failure to honor within the time here specified
constitutes dishonor of the draft or demand and of the
credit.

(2)    Upon dishonor the bank may unless otherwise
instructed fulfill its duty to return the draft or demand
and the documents by holding them at the disposal of the
presenter and sending him an advice to that effect.

(3)   "Presenter" means any person presenting a draft
or demand for payment for honor under a credit even
though that person is a confirming bank or other
correspondent which is acting under an issuer's
authorization.

5—113. Indemnities.

(1)   A bank seeking to obtain (whether for itself or
another) honor, negotiation, or reimbursement under a
credit may give an indemnity to induce such honor,
negotiation, or reimbursement.

(2)    An indemnity agreement inducing honor,
negotiation, or reimbursement

(a)     Unless otherwise explicitly agreed
applies to defects in the documents but not in the goods;

and

(b)   Unless a longer time is explicitly agreed
expires at the end of ten business days following receipt
of the documents by the ultimate customer unless notice
of objection is sent before such expiration date. The
ultimate customer may send notice of objection to the
person from whom he received the documents and any bank
receiving such notice is under a duty to send notice to
its transferor before its midnight deadline.

5—114. Issuer's duty and privilege to honor; right to
reimbursement.

(1) An issuer must honor a draft or demand for
payment which complies with the terms of the relevant
credit regardless of whether the goods or documents