Ch. 652

1997 LAWS OF MARYLAND

LETTER OF CREDIT IS NOT FOR THE PAYMENT OF MONEY, THE CLAIMANT MAY
OBTAIN SPECIFIC PERFORMANCE OR, AT THE CLAIMANT'S ELECTION, RECOVER AN
AMOUNT EQUAL TO THE VALUE OF PERFORMANCE FROM THE ISSUER. IN EITHER
CASE, THE CLAIMANT MAY ALSO RECOVER INCIDENTAL BUT NOT CONSEQUENTIAL
DAMAGES. THE CLAIMANT IS NOT OBLIGATED TO TAKE ACTION TO AVOID
DAMAGES THAT MIGHT BE DUE FROM THE ISSUER UNDER THIS SUBSECTION. IF,
ALTHOUGH NOT OBLIGATED TO DO SO, THE CLAIMANT AVOIDS DAMAGES, THE
CLAIMANT'S RECOVERY FROM THE ISSUER MUST BE REDUCED BY THE AMOUNT OF
DAMAGES AVOIDED. THE ISSUER HAS THE BURDEN OF PROVING THE AMOUNT OF
DAMAGES AVOIDED. IN THE CASE OF REPUDIATION THE CLAIMANT NEED NOT
PRESENT ANY DOCUMENT.

(B)     IF AN ISSUER WRONGFULLY DISHONORS A DRAFT OR DEMAND
PRESENTED UNDER A LETTER OF CREDIT OR HONORS A DRAFT OR DEMAND IN
BREACH OF ITS OBLIGATION TO THE APPLICANT, THE APPLICANT MAY RECOVER
DAMAGES RESULTING FROM THE BREACH, INCLUDING INCIDENTAL BUT NOT
CONSEQUENTIAL DAMAGES, LESS ANY AMOUNT SAVED AS A RESULT OF THE
BREACH.

(C)     IF AN ADVISER OR NOMINATED PERSON OTHER THAN A CONFIRMER
BREACHES AN OBLIGATION UNDER THIS ARTICLE OR AN ISSUER BREACHES AN
OBLIGATION NOT COVERED IN SUBSECTION (A) OR (B) OF THIS SECTION, A PERSON
TO WHOM THE OBLIGATION IS OWED MAY RECOVER DAMAGES RESULTING FROM
THE BREACH, INCLUDING INCIDENTAL BUT NOT CONSEQUENTIAL DAMAGES, LESS
ANY AMOUNT SAVED AS A RESULT OF THE BREACH. TO THE EXTENT OF THE
CONFIRMATION, A CONFIRMER HAS THE LIABILITY OF AN ISSUER SPECIFIED IN THIS
SUBSECTION AND SUBSECTIONS (A) AND (B) OF THIS SECTION.

(D)    AN ISSUER, NOMINATED PERSON, OR ADVISER WHO IS FOUND LIABLE
UNDER SUBSECTION (A), (B), OR (C) OF THIS SECTION SHALL PAY INTEREST ON THE
AMOUNT OWED THEREUNDER FROM THE DATE OF WRONGFUL DISHONOR OR
OTHER APPROPRIATE DATE.

(E)     REASONABLE ATTORNEY'S FEES AND OTHER EXPENSES OF LITIGATION
MUST BE AWARDED TO THE PREVAILING PARTY IN AN ACTION IN WHICH A REMEDY
IS SOUGHT UNDER THIS TITLE.

(F)     DAMAGES THAT WOULD OTHERWISE BE PAYABLE BY A PARTY FOR
BREACH OF AN OBLIGATION UNDER THIS TITLE MAY BE LIQUIDATED BY
AGREEMENT OR UNDERTAKING, BUT ONLY IN AN AMOUNT OR BY A FORMULA
THAT IS REASONABLE IN LIGHT OF THE HARM ANTICIPATED.

5-112. TRANSFER OF LETTER OF CREDIT.

(A)    EXCEPT AS OTHERWISE PROVIDED IN § 5-113 OF THIS TITLE, UNLESS A
LETTER OF CREDIT PROVIDES THAT IT IS TRANSFERABLE, THE RIGHT OF A
BENEFICIARY TO DRAW OR OTHERWISE DEMAND PERFORMANCE UNDER A LETTER
OF CREDIT MAY NOT BE TRANSFERRED.

(B)     EVEN IF A LETTER OF CREDIT PROVIDES THAT IT IS TRANSFERABLE, THE
ISSUER MAY REFUSE TO RECOGNIZE OR CARRY OUT A TRANSFER IF:

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