5111 - Remedies.
§ 5111. Remedies. (a) Wrongful dishonor or repudiation before presentation.-- If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor or nominated person presenting on its own behalf may recover from the issuer the amount that is the subject of the dishonor or repudiation. If the issuer's obligation under the letter of credit is not for the payment of money, the claimant may obtain specific performance or, at the claimant's election, recover an amount equal to the value of performance from the issuer. In either case, the claimant may also recover incidental but not consequential damages. The claimant is not obligated to take action to avoid damages that might be due from the issuer under this subsection. If, although not obligated to do so, the claimant avoids damages, the claimant's recovery from the issuer must be reduced by the amount of damages avoided. The issuer has the burden of proving the amount of damages avoided. In the case of repudiation the claimant need not present any document. (b) Wrongful dishonor upon presentation; wrongful honor.--If an issuer wrongfully dishonors a draft or demand presented under a letter of credit or honors a draft or demand in breach of its obligation to the applicant, the applicant may recover damages resulting from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach. (c) Certain other breaches.--If an adviser or nominated person other than a confirmer breaches an obligation under this division or an issuer breaches an obligation not covered in subsection (a) or (b), a person to whom the obligation is owed may recover damages resulting from the breach, including incidental but not consequential damages, less any amount saved as a result of the breach. To the extent of the confirmation, a confirmer has the liability of an issuer specified in this subsection and subsections (a) and (b). (d) Interest.--An issuer, nominated person or advisor who is found liable under subsection (a), (b) or (c) shall pay interest on the amount owed thereunder from the date of wrongful dishonor or other appropriate date. (e) Attorney fees.--Reasonable attorney fees and other expenses of litigation may be awarded to the prevailing party in an action in which a remedy is sought under this division. (f) Liquidated damages.--Damages that would otherwise be payable by a party for breach of an obligation under this division may be liquidated by agreement or undertaking but only in an amount or by a formula that is reasonable in light of the harm anticipated. Special Provisions in Appendix. See section 28 of Act 18 of 2001 in the appendix to this title for special provisions relating to applicability of transitional provisions. Cross References. Section 5111 is referred to in section 9700 of this title.