Sunset Investments, Ltd. v. Sargent

WELLS, Judge.

The dispositive question in this law suit is whether the letter of credit issued by defendant Bank dated 13 November 1978 in favor of defendants S, R, and V is a “clean” credit, requiring no documentation for honor and payment; or, whether it is a “documentary” credit, requiring documentation for honor and payment.

A brief, general discussion of the nature and use of letters of credit may help clarify our task. 1 Letters of credit, in one form or another, have been used for centuries to facilitate commercial transactions. Although traditionally used more frequently in…