LexisNexis ( January 23, 2019, 11:10 AM EST) -- In the last issue of this newsletter, we discussed the “independence principle” that is a fundamental tenet of letter of credit law. The second important principle governing letters of credit is that the issuer must honor a presentment of documents that appears on its face “strictly to comply with the terms and conditions of the letter of credit.” UCC 5-108(a). Though this rule applies to both commercial and standby letters, it has greater significance for commercial letters of credit because the documents are more numerous and complex than in standby letters. Default on the underlying contract by the beneficiary is irrelevant; the key is strict conformity of the documents to the requirements of the letter. If an issuer refuses to pay a draft accompanied by documents that are conforming in all respects, it will be guilty of wrongful dishonor, with sanctions, under UCC 5-111(a)....