§12A-5-108.

§12A-5-108.
   
   Issuer's Rights and Obligations.
   
   (a) Except as otherwise provided in Section 5-109 of this title, an
   issuer shall honor a presentation that, as determined by the standard
   practice referred to in subsection (e) of this section, appears on its
   face strictly to comply with the terms and conditions of the letter of
   credit. Except as otherwise provided in Section 5-113 of this title
   and unless otherwise agreed with the applicant, an issuer shall
   dishonor a presentation that does not appear so to comply.
   
   (b) An issuer has a reasonable time after presentation, but not beyond
   the end of the seventh business day of the issuer after the day of its
   receipt of documents:
   
   (1) To honor;
   
   (2) If the letter of credit provides for honor to be completed more
   than seven (7) business days after presentation, to accept a draft or
   incur a deferred obligation; or
   
   (3) To give notice to the presenter of discrepancies in the
   presentation.
   
   (c) Except as otherwise provided in subsection (d) of this section, 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.
   
   (d) Failure to give the notice specified in subsection (b) of this
   section 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 subsection (a) of Section 5-109 of this
   title or expiration of the letter of credit before presentation.
   
   (e) An issuer shall observe standard practice of financial
   institutions that regularly issue letters of credit. Determination of
   the issuer's observance 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.
   
   (f) An issuer is not responsible for:
   
   (1) The performance or nonperformance of the underlying contract,
   arrangement, or transaction;
   
   (2) An act or omission of others; or
   
   (3) Observance or knowledge of the usage of a particular trade other
   than the standard practice referred to in subsection (e) of this
   section.
   
   (g) If an undertaking constituting a letter of credit under paragraph
   (10) of subsection (a) of Section 5-102 of this title contains
   nondocumentary conditions, an issuer shall disregard the
   nondocumentary conditions and treat them as if they were not stated.
   
   (h) An issuer that has dishonored a presentation shall return the
   documents or hold them at the disposal of, and send advice to that
   effect to, the presenter.
   
   (i) An issuer that has honored a presentation as permitted or required
   by this article:
   
   (1) Is entitled to be reimbursed by the applicant in immediately
   available funds not later than the date of its payment of funds;
   
   (2) Takes the documents free of claims of the beneficiary or
   presenter;
   
   (3) Is precluded from asserting a right of recourse on a draft under
   Sections 3-414 and 3-415 of this title;
   
   (4) Except as otherwise provided in Sections 5-110 and 5-117 of this
   title, is precluded from restitution of money paid or other value
   given by mistake to the extent the mistake concerns discrepancies in
   the documents or tender which are apparent on the face of the
   presentation; and
   
   (5) Is discharged to the extent of its performance under the letter of
   credit unless the issuer honored a presentation in which a required
   signature of a beneficiary was forged.