Article

Underlying Contract; Damages.

Prior History:

Samsung America, Inc. v. Yugoslav-Korean Consulting& Trading Co., Inc.,N.Y.L.J. 13 April 1997 at 25 (N.Y. Sup. Ct. 1997) ,abstracted at1998 Annual Survey488.

Note: A commercial letter of credit was issued to cover the shipment of goods by a U.S. subsidiary of a Korean corporation, the beneficiary/seller, to an applicant in former Yugoslavia. After the beneficiary failed to receive payment under the letter of credit, it brought suit against the applicant on the underlying contract for the price of the goods. The applicant sought and was awarded summary judgment on several counts, arguing that the beneficiary was not entitled to the price of the goods because the letter of credit was not paid due to the beneficiary's own failure to present the proper documents. On appeal, the appellate court reversed and modified the decision, noting that as long as the applicant received the goods, which was not disputed, it was liable for their price and the reason for the bank's dishonor of the LC was irrelevant. The appellate court stated "[a]t most, if they are able to establish that it was [beneficiary's] fault that the letters were dishonored, [applicant] may have a claim for damages related to the allegedly wrongful failure to present the documentation."

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