1. An issuer's obligation to its customer includes good faith and observance of any general banking usage but unless otherwise agreed does not include liability or responsibility
a. for performance of the underlying contract for sale or other transaction between the customer and the beneficiary; or
b. for any act or omission of any person other than itself or its own branch or for loss or destruction of a draft, demand or document in transit or in the possession of others; or
c. based on knowledge or lack of knowledge of any usage of any particular trade.
2. An issuer must examine documents with care so as to ascertain that on their face they appear to comply with the terms of the credit but unless otherwise agreed assumes no liability or responsibility for the genuineness, falsification or effect of any document which appears on such examination to be regular on its face.
3. A nonbank issuer is not bound by any banking usage of which it has no knowledge.
[C66, 71, 73, 75, 77, 79, 81, § 554.5109]
Iowa General Assembly
Search: Iowa Code 1995
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