Sherwood & Roberts, Inc. v. First Security Bank

The letter of credit issued by First Security specifies that payment becomes due only upon unremedied default. I disagree with the majority’s conclusion that under the facts of this case, mere non-payment by Prospect constitutes “unremedied default” and automatically triggers liability on the letter of credit.

Section 30-5-114(1), MCA provides that an issuer must honor a demand for payment which complies with the terms of the relevant credit regardless of whether goods or documents conform to the underlying contract between the customer and beneficiary. Strict compliance with the terms of the…