Printable Format84-5-106. Issuance, amendment, cancellation and duration. (a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides.
(b) After a letter of credit is issued, rights and obligations of a beneficiary, applicant, confirmer, and issuer are not affected by an amendment or cancellation to which that person has not consented except to the extent the letter of credit provides that it is revocable or that the issuer may amend or cancel the letter of credit without that consent.
(c) If there is no stated expiration date or other provision that determines its duration, a letter of credit expires one year after its stated date of issuance or, if none is stated, after the date on which it is issued.
(d) A letter of credit that states that it is perpetual expires five years after its stated date of issuance, or if none is stated, after the date on which it is issued.
History: L. 1996, ch. 202, § 6; July 1.
KANSAS COMMENT, 1996
This section is derived from the former 84-5-106. It is identical to the 1995 Official Text. Historical references to the former provision may be obtained from the Kansas Comment 1965 and Kansas Comment 1983 in the former bound Volumes 7 of the Kansas Statutes Annotated.
Subsection (a) states when a letter of credit is issued and becomes enforceable against the issuer. 84-5-102(a)(9) defines the issuer as the person who issues a letter of credit, which is defined in 84-5-102(a)(10) as an undertaking to a beneficiary to honor a proper documentary presentation by paying or delivering a thing of value. There is no requirement of acceptance by the beneficiary, and 84-5-105 provides that no consideration is required for the letter to be binding on the issuer. The letter is irrevocable unless the letter itself provides it can be revoked.
Subsection (b) provides that an irrevocable letter can be modified or revoked only with the consent of the beneficiary and the customer, except where the letter indicates that it is revocable or amendable. Under 84-5-104, any modification or cancellation must be a record and authenticated. Although consent to the modification may be required, the consent need not be in writing. 84-5-104.
The expiration dates in 84-5-106(c) and (d) are new. Subsection (c) provides a one-year expiration from the stated or actual date of issue if no expiration date is stated and no other provision determines the expiration. A standby letter for a particular project would not expire, by its terms, until the project was completed. Subsection (d) abolishes perpetual letters, and such a letter will expire five years after its stated date of issuance, or if none is stated, after the actual date of issuance.
Revisor's Note:
Former section 84-5-106 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.