Inlets "Bright Orange Air" and "Junk"
by josh keller · Published · Updated
Inlets are a band that dabble in the kind of fragile baroque pop that Grizzly Bear has made so very popular. On tracks like “Bright Orange Air,” the group proves their chops shifting between hushed vocals and smooth guitars and swelling instrumentation, never venturing too far into the over-dramatic vein that can derail this type of music for many bands. They recently released their debut album Inter Arbiter and it proved to be a lush and well thought out record that, while not blowing me away, clearly showed a young and talented artist. They also have recently released a free MP3 of themselves covering Paul McCartney’s song “Junk,” which is also below. The group will be playing tonight with DM Stith and Silje Nes at the Cedar Cultural Center.
Inlets- Junk (Paul McCartney Cover)
Strict Compliance Applies to Letter of Credit Issuers, Too
The Secured Lender September 1, 2007 | Kolko, Daniel M Letters of credit are unique and invaluable financial and commercial instruments, for they interpose rthe stability, wherewithal, and (often) the irrevocable commitment of the issuer bank to satisfy the obligations of another person or entity engaged in a transaction, thus reducing (if not removing) financial risk and encouraging parties to enter into a transaction they may otherwise avoid.
Letters of credit are independent of the underlying transactions they secure and, therefore, payment by the issuer bank to the beneficiary of the credit is generally required if the terms of the credit are satisfied regardless of any underlying disputes between the contracting parties.1 The beneficiary is bound by the familiar principle of strict compliance, by which the beneficiary can compel the issuer’s performance of its independent obligation to pay only if the beneficiary strictly complies with the terms of the credit. Less well-defined in the case law is the converse: are credit issuers bound by the same exacting strict compliance standard?
This article summarizes the strict compliance rule with its generally accepted application to beneficiaries and then discusses a recent case applying the standard to issuers.
The strict compliance rule Under the strict compliance rule, followed by the vast majority of jurisdictions, presentment (demand for payment) by the beneficiary under a letter of credit must strictly comply with the terms and conditions of the credit. Supporting draw documents must correspond exactly to what the letter of credit prescribes, and they must be presented in the precise manner specified in the credit.
Article 5 of the Uniform Commercial Code of most states provides that “an issuer shall honor a presentation that . . . appears on its face strictly to comply with the terms and conditions of the letter of credit.”2 Conversely, if the documents or the manner of presentment fails strictly to conform to the credit terms, then the issuer bank “shall dishonor” the draw.3 According to a widely quoted holding, in letter of credit transactions “[tjhere is no room for documents which are almost the same, or which will do just as well.”4 The rationale for the strict compliance rule is rooted in the need to preserve the commercial vitality of letters of credit by fostering certainty to the greatest extent possible. As one federal appellate court observed, if banks deviate or are allowed to deviate from the terms of a letter of credit, “the certainty that makes this device so attractive and useful may well be undermined, with the result that banks may become reluctant to assume the additional risks of litigation.”5 The strict compliance rule plays a pivotal role in letter of credit transactions since it is estimated that as many as half of all presentments are discrepant.6 It appears that New York state and federal courts adhere closely to the strict compliance rule, not a surprising conclusion given New York’s position as the epicenter of banking and international commerce, and the frequent use of these instruments in those endeavors.
What’s in a name? Everything, according to the U.S. Court of Appeals for the Second Circuit. In Beyene v. Irving Trust Co., 762 F2d 4 (2d Cir. 1985), an often-cited strict compliance decision, plaintiff-beneficiaries sued for damages based on the bank’s alleged wrongful dishonor of a letter of credit. The credit required that the bill of lading presented with the credit state that notice of the arrival of goods had been given to Mohammed “Sofan.” Instead, the bill of lading listed the individual as Mohammed “Soran,” a discrepancy that the Second Circuit held justified the bank’s refusal to honor the demand for payment. go to web site letter of credit
The exact words prescribed must be recited, according to the U.S. Court of Appeals for the Third Circuit. In Chase Manhattan Bank v. Equibank, 550 F2d 882 (3d Cir. 1977), the letter of credit required the beneficiary to present a certification stating that the applicant (the party who requests the bank to issue the credit) was in “default” to draw the credit. The beneficiary’s certification referred to the applicant’s numerous breaches of contract, but did not state in haec verba that the applicant was in “default” and was thus insufficient to satisfy the credit’s terms.
In Lease America Corp. v. Norwest Bank Duluth, 940 F2d 345 (8th Cir. 1991), the letter of credit required that the landlord-beneficiary submit an affidavit to the issuer affirming that 10-days notice of default had been given to the tenant prior to presentment. Instead, the beneficiary presented an affidavit from the tenant waiving the notice that was intended for its benefit. The U.S. Court of Appeals for the Eighth Circuit affirmed summary judgment for the issuer bank, holding that the draw was noncompliant and properly dishonored by the bank, and that any amendment to the terms of the credit regarding notice of default required the bank’s consent.
Where the credit terms require presentment of the original letter of credit with a draw, several courts have held that the tender instead of a true and complete copy justifies a bank’s dishonor of the draw.7 No rule is without its exceptions. For example, some minor variations from the credit terms may be excused where the discrepancy is an obvious typographical error, for instance where the name “Smith” is misspelled as “Smithh.”8 Bank’s nonrenewal notice The beneficiary’s presentment under a letter of credit and the bank’s response is the subject of scrutiny in almost all case law addressing the strict compliance rule. However, issuer banks may also have performance obligations under a credit (in addition to the obvious obligation to pay), such as notice requirements, including notices related to nonrenewal of credits that otherwise automatically renew pursuant to so-called “evergreen” provisions. Does the strict compliance rule apply to the issuer’s performance? web site letter of credit
A recent case answered that question affirmatively, applying the strict compliance rule to a nonrenewal notice prepared by the issuer bank purporting to terminate the letter of credit. In The Travelers Indemnity Company v. U.S. Bank National Association, 2006 WL 1074910, 59 UCC Rep.Serv.2d 786 (Conn.Super. 2006),9 the standby letter of credit issued in favor of a Travelers subsidiary contained an evergreen clause, by which the credit automatically renewed unless the bank timely sent written notice of nonrenewal. The beneficiary was entitled to draw the credit in full if the credit was not renewed.
The issuer bank sent the notice within the time provided, but sent it to the wrong address in Travelers’ massive office complex and addressed it to Travelers and not to the subsidiary-beneficiary, who was located in the same office complex. The notice also failed to list an “attention party,” a specific individual employed by the beneficiary with responsibility for such credits, as required by the credit terms. Despite these discrepancies, the notice was received in Travelers’ mail center but thereafter there is no record that either the beneficiary or Travelers’ letter of credit department received the notice.
When the credit was drawn upon several months later, the bank rejected the sight draft, asserting that the credit had expired by virtue of the nonrenewal notice.
Travelers asserted that neither its nor its subsidiary’s letter of credit departments had received the defect-laden nonrenewal notice, that the notice was ineffective due to the material discrepancies and that the credit never expired.
Both parties moved for summary judgment. The issue for the court, in essence, was which party would absorb the loss, the issuer bank or the beneficiary. (The entity whose obligations to the beneficiary were backed by the standby letter of credit had become defunct.) The court applied the strict compliance rule to the bank’s nonrenewal notice and held that the notice failed to strictly conform to the credit terms and was thus ineffective to terminate the credit. The court granted summary judgment in favor of Travelers and against the bank for wrongful dishonor.
The court stated: “the strict compliance rule applicable to letters of credit required Notice of Non-Renewal be sent to the attention party at the location specified. . . . The Bank’s failure to comply with the LC… subjected the [notice] package to additional risk of loss within Travelers’ massive office complex…. [The Bank’s] failure to strictly comply with the LC terms in not directing the Notice to the party and location specifically designated renders the [Notice] legally ineffective particularly where, as here, there is no evidence of receipt by [the beneficiary].”10 The efficacy of a nonrenewal notice sent by the bank was also at issue in 3Com Corp. v. Banco Do Brasil, S.A., 171 F3d 739 (2d Cir. 1999).11 In 3Com, the letter of credit also contained an evergreen clause that required written notice of nonrenewal by the issuer bank to terminate the credit. After making written requests for the beneficiary’s voluntary consent to cancel the credit before its expiration date, the bank sent a telex prior to the credit’s May 20, 1996 expiry stating, “please cancel [the credit] and release us from liabilities….” The bank rejected the beneficiary’s subsequent draft on the ground that the credit had already expired and the beneficiary brought suit for wrongful dishonor.
The Second Circuit found that because the letter of credit was subject to the International Chamber of Commerce’s Uniform Customs and Practice for Documentary Credits (UCP), the credit required that the bank’s notice of nonrenewal be “clear and unequivocal.”12 The court held, as a matter of law, that the notice did not meet that standard since the telex could have been construed as yet another request for consensual cancellation prior to the expiry date of the credit, and affirmed summary judgment for the plaintiff-beneficiary. The 3Com court suggested that the clearest notice of nonrenewal would have tracked the language of the evergreen clause which stated: “We have elected not to renew the credit beyond May 20, 1996.” The nonrenewal notice in 3Com would likely have been found ineffectual under the strict compliance standard.
Another case enforced the strict compliance rule without invoking its name against an issuer bank’s nonrenewal notice in International Fidelity Ins. Co. v. State BankofCommerce, 1988 WL 59853 (E.D. La. 1988) (nonrenewal notice sent by the bank by certified mail ineffective where the letter of credit required it be sent by registered mail and the beneficiary denied receipt; in awarding summary judgment to plaintiff, the court held there was no “notification in the manner required by the letter of credit”).
Strict preclusion rule Conclusion As demonstrated by the Travelers case, the strict compliance rule should be applied to documents prepared or submitted in a letter of credit transaction, whether prepared by the issuer bank or the beneficiary. As a leading authority observes, the strict compliance standard reflects the notion that “[cjourts in this area are not dealing with widows and orphans…. There is no reason to bend the law of credits out of shape and to destroy an efficient commercial device to protect careless, less than diligent professionals. If they do not know the rules, let them eat the cake of compliance.”15 [Sidebar] Where the credit terms require presentment of the original letter of credit with a draw, several courts have held that the tender instead of a true and complete copy justifies a bank’s dishonor of the draw.
[Sidebar] Reprinted with permission from the March 9, 2007 edition of the New York Law Journal ?© 2007 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.
Eric G. Waxman HI, an attorney in Uniondale, NY, assisted in the preparation of this article.
[Author Affiliation] Daniel M. Kolko is a senior litigation attorney with Phillips Nizer, New York, NY, concentrating in commercial litigation including letter of credit cases.
Kolko, Daniel M
Hypertext publications: a point-and-click universe. (selected World Wide Web information)(Brief Article)
Information Today April 1, 1995 | McCulley, P. Michael What’s News and New * 1996 serials price projections and trends analysis * Bibliographic and pricing information on new serials publications * Links to over 200 publishers on the WWW * A guide to the Internet designed for librarians * Organizations and resources for library and publishing standards * Details of the latest advances in EDI in the serials industry * Technical support on Faxon products * Guide to Gardens of the USA – a listing of over 700 gardens open to the public in the USA. We expect to almost double this amount in the next couple of months.
* Guide to Garden Associations – information on 30 associations, and this guide is still growing.
* Guide to Garden Catalogs – right now, names and addresses of more than 150 mail-order catalogs, and this guide is still growing too.
* Guide to Garden Publication – will be online within the month.
* Garden Calendar of Events – events, tours, shows by month. …
* GardenNet Showcase – detailed information from garden and gardening organizations. For example, the Rhododendron Species Botanical Garden (WA) (including their plant distribution catalog) and the Roseraie at Bayfields (ME) (including their spring 1995 catalog) are now up and ready for browsers. More to come in the weeks ahead!
The Scout Report (Brief Notices) – The The Scout Report is published once a week by interNIC and gives many interesting pointers to new information resources available via the Internet. Here are a few items I noted from recent issues, followed by a How-To-Get-It section.
Below are the details on getting the various versions of The Scout Report, quoted from a recent issue: site best web browser
“The Scout Report is a weekly publication offered by InterNIC Information Services to the Internet community as a fast, convenient way to stay informed about network activities. Its purpose is to combine in one place the highlights of new (and newly discovered) online resources and other announcements seen on the Internet during the preceding week. A wide range of topics is included in the Report with an emphasis on resources thought to be of interest to the InterNIC’s primary audience, the research education community. Each resource has been verified for substantial content and accessibility within a day of the release of the Report.
“The Scout Report is provided in multiple formats – electronic mail, gopher, World Wide Web, and HTML. The gopher and World Wide Web versions of the Report include links to all listed resources. The report is released at the start of each week. In addition to the plain text version, the Scout Report is distributed in HTML format via a separate mailing list. This allows sites to easily add the Scout Report to their local World Wide Web servers each week, providing fast access for local users.
“IFLA, in conjunction with SilverPlatter Information Inc. and the UDT Core Programme, is pleased to present IFLANET, our new Internet hypertext information system. We look forward to presenting our members and interested individuals with an evolving range of electronic information resources and services through the use of Internet technologies. The International Federation of Library Associations and Institutions (IFLA) is a worldwide, independent organization created to provide librarians around the world with a forum for exchanging ideas, promoting international cooperation, research and development in all fields of library activity. … It is registered in the Netherlands as an Institutional Association and has its secretariat in The Hague. Over 1,200 institutional and individual members from more than 135 countries currently comprise IFLA’s membership, which is extended to all countries providing library and information services. The Annual General Conference, held in August, provides an opportunity for colleagues from around the world to meet and identify and discuss their concerns. go to website best web browser
“Among the current electronic services of INFLANET:
* A WWW brochure with information about the 1995 IFLA Conference, which will be held in Istanbul, August 20-25 * IFLA listserver (electronic mailing list) – Information about subscribing to the IFLA mailing list * The IFLA Virtual Library – A collection of Internet guides, information policy statements, virtual library papers, standards pointers, and other documents of note. Some of the documents and pointers included here are:
– standards information and organizations pointers – a selection of those RFCS that might appeal to a general readership or individuals interested in the intersection of Internet technologies and the future “virtual library.” – a selection of Internet and WWW indexes and finding aids – Library and related information policy statements – Internet and Library Software Archive – A selection of freeware and shareware applications for libraries and for Internet use – HTML and ASCII versions of the UDT Newsletter Employment Guide Now Up Via Hypertext – Here’s a portion of a release announcing a great job-hunting resource:
“The largest guide to job hunting on the Internet has been taken to hypertext! This version has updated links and new information and will be the most current version of the guide.” 1) Gopher://una.hh.lib.umich.edu:70/00/inetdirsstacks/jobs%3ariley. This is The Clearinghouse of Subject-Oriented Internet Resource Guides at the University of Michigan (permits anonymous ftp access and WWW access, and boasts a full-text WAIS index.) These are all ASCII files. Contact Lou Rosenfeld with questions about the Clearinghouse.
2) Gopher://gopher.wpi.edu:70/11/depts/Library/career/jobguide. This is a gopher at the Worcester Polytechnic Institute, Worcester, Massachusetts, which has the guide split into 6 files, each under 20K.
>> Libraries of the Future: The IAT folks have a document available with references to articles about the future of libraries. To get a copy, gopher to ike.engr.washington.edu; menu path: /Academic Technology Services/Institute for Academic Technology/Resource Guides and Bibliographies/Libraries: Today’s Issues, Tomorrow’s Challenges. You can also get a copy via anonymous ftp, gandalf.iat.unc.edu; directory: guides; filename: irg-17.txt.
>>Poetry Archive with Readings: Here’s a quoted section from INFOBITS (January 1995 issue) about online poetry:
“The University of North Carolina Press and the University of North Carolina at Chapel Hill’s Office of Information Technology, in a first-of-its-kind project, are making the works of several contemporary poets available online through the Internet Poetry Archive. The archive will include the works of living poets around the world. The initial offering will feature eight poets. The first two represented on the site are Czeslaw Milosz and Seamus Heaney. The archive includes not only texts of the poems, but also readings in audio files (including both English and Polish versions for Milosz’s selections), biographical information, and bibliographies.” And that’s a Tax Wave to think about. Happy Surfing!
P. Michael McCulley is President, GENESIS Information Services, San Diego, CA, and can be reached at [email protected], or visit the Home Page at ftp://ftp.netcom.com/pub/GI/GIS/genhome.html.
McCulley, P. Michael
Writer / co-founder