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Dorsaneo, Texas Litigation Guide
Copyright 2016, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

16-236 Dorsaneo, Texas Litigation Guide 236.syn


Letters of Credit


Professor William V. Dorsaneo III

Chapter Summary


This chapter from Dorsaneo, Texas Litigation Guide discusses letter of credit law, focusing on the provisions of the principal domestic statute, the Uniform Commercial Code. The chapter also examines international practice codes that play a significant role in this area of the law.

Part I covers letters of credit, discussing the function of letters of credit, including commercial letters of credit as a payment mechanism used when the underlying transaction involves the sale of goods. Letters of credit as a form of guarantee, generally in a nonsales setting, are also given treatment, as are standby letters of credit. The chapter then gives the Uniform Commercial Code definition of letters of credit, as well as the practical function of letters of credit, which includes discussion of the independence principle, presentation standards, effectiveness of the letter of credit, and duration.

Part I next includes the creation and existence of letters of credit, with coverage of the formal requirements, consideration, issuance, revocability, expiration date and duration, and amendment and cancellation. The rights and obligations of the issuer state that an issuer must observe the standard practice of financial institutions that regularly issue letters of credit. The chapter then covers the principle that an issuer is not responsible for performance or nonperformance of the underlying contract, acts or omissions of others, and changes from former rules.

Additionally, treatment is given to transfer and assignment, fraud and forgery, and security interests. Remedies are discussed including injunctive relief, wrongful honor or dishonor, breach of warranty, procedural considerations, and subrogation. Parts II-IV of the chapter include a drafting guide, forms, and a research guide.

Dorsaneo, Texas Litigation Guide (Matthew Bender) provides a step-by-step guide to civil procedure in Texas, from filing the petition through appellate procedure, with substantive practice-area topics offering legal background, checklists, forms, and research guides. It covers business entities, commercial, real estate, personal injury, family law, and probate litigation, as well as administrative proceedings.


Texas,banking law,letters of credit,consideration,transfer,assignment,fraud,forgery,injunctive relief,remedies,subrogation,UCC,Uniform Commercial Code


Basic contract law, which applies in a limited fashion to letters of credit, is discussed in Ch. 210A, Contracts; the general standards for injunctive relief, applicable to requests for anti-honor injunctions, are discussed in Ch. 50, Injunction; and warranty actions are discussed in Ch. 221, Warranties.


See Texas Civil Trial Guide (Matthew Bender) for comprehensive, authoritative, and up-to-date coverage of pleadings, motions, trial settings, continuances, consolidation and severance, jury selection, motions for judgment, and closing argument.

See Texas Civil Trial and Appellate Procedure (Matthew Bender) for a solid foundation for civil trial or appellate practice, covering everything from analyses of court rules, statutes, and cases to the underlying laws governing civil and appellate procedure.

See Texas Transaction Guide: Legal Forms (Matthew Bender) for legal background, research aids, practice guides, and forms relating to business entities, wills and trusts, commercial dealings, real estate, marriage and divorce, and bankruptcy.

See Commercial Law and Practice Guide (Matthew Bender) for a unique combination of in-depth substantive analysis and practical guidance for handling commercial transactions, including sales transactions, leasing transactions, negotiable instrument transactions, letters of credit, and secured transactions.
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