Vermont § 109 - § 5—109.

§ 109. § 5—109.

• Fraud and forgery (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 (i) a nominated person
  who has given value in good faith and without notice of forgery or material fraud,
  (ii) a confirmer who has honored its confirmation in good faith, (iii) 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 (iv) 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 subdivision (a)(1) of this section. (Added 1997, No. 65 (Adj. Sess.), § 1, eff. Jan. 1, 1999.)