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Note: Claiming fraud on the part of Paul Morgan (Seller), Senarh S.A. (Buyer) sued Seller for fraud in relation to the purchase of soybean oil. Judgment was entered on a verdict by the jury for Buyer. On appeal, the Appellate Division of the Supreme Court of New York, Andrias, J.P., Sweeny, McGuire, Acosta, and Richter, JJ, in a per curiam opinion reversed and ordered that Seller's motion to set aside the verdict be granted.

The appellate court ruled that the evidence was legally insufficient to support the jury's finding that Buyer had relied on false statements made by Seller in opening and amending a letter of credit. The appellate court noted that the letters containing the statement were received after the LC was opened, making it impossible for Buyer to have relied on it in opening the LCs. Moreover, the court noted that Buyer was required by the terms of the contract to open the LCs, and commenting that it could not be defrauded into doing something that it was legally bound to do.

[JEB]

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