New Jersey § 12a:5-109
Full text of New Jersey New Jersey Statutes § 12a:5-109, with citation guidance and answers to common questions.
§ 12a:5-109.
a. If a presentation is made that appears on its face strictly to comply with the
terms and conditions of the letter of credit, but a required document is forged or
materially fraudulent, or honor of the presentation would facilitate a material fraud
by the beneficiary on the issuer or applicant: (1) the issuer shall honor the presentation, if honor is demanded by (a) a nominated
person who has given value in good faith and without notice of forgery or material
fraud, (b) a confirmer who has honored its confirmation in good faith, (c) a holder
in due course of a draft drawn under the letter of credit which was taken after acceptance
by the issuer or nominated person, or (d) an assignee of the issuer's or nominated
person's deferred obligation that was taken for value and without notice of forgery
or material fraud after the obligation was incurred by the issuer or nominated person;
and (2) the issuer, acting in good faith, may honor or dishonor the presentation in any
other case. b. If an applicant claims that a required document is forged or materially fraudulent
or that honor of the presentation would facilitate a material fraud by the beneficiary
on the issuer or applicant, a court of competent jurisdiction may temporarily or permanently
enjoin the issuer from honoring a presentation or grant similar relief against the
issuer or other persons only if the court finds that: (1) the relief is not prohibited under the law applicable to an accepted draft or
deferred obligation incurred by the issuer; (2) a beneficiary, issuer, or nominated person who may be adversely affected is adequately
protected against loss that it may suffer because the relief is granted; (3) all of the conditions to entitle a person to the relief under the law of this
State have been met; and (4) on the basis of the information submitted to the court, the applicant is more
likely than not to succeed under its claim of forgery or material fraud and the person
demanding honor does not qualify for protection under paragraph (1) of subsection
a. of this section.
Frequently Asked Questions About New Jersey § 12a:5-109
What does New Jersey Statutes § 12a:5-109 cover?
Section 12a:5-109 is part of the New Jersey Statutes, the codified statutory law of New Jersey. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite New Jersey § 12a:5-109?
A common citation format is "New Jersey Statutes § 12a:5-109" (New Jersey). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of New Jersey law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the New Jersey official source linked on this page or consult a licensed New Jersey attorney.
How does New Jersey § 12a:5-109 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in New Jersey can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in New Jersey.