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CARTER PETROLEUM PRODUCTS, INC. v. Brotherhood Bank & Trust Co. Case Brief
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Case Brief Summary & Legal Analysis
tl;dr: A bank refused to honor a letter of credit, claiming untimely presentment and non-conforming documents. The court found for the beneficiary, holding that presentment was timely and the documents strictly complied because any discrepancies, including the correction of the bank’s own typo, could not have misled the bank.
Legal Significance: This case establishes that under UCC Article 5, the “strict compliance” standard is not “slavish conformity.” A presentation complies if discrepancies are minor and could not possibly mislead a document examiner, especially when the issuer’s own drafting created the ambiguity or error.
CARTER PETROLEUM PRODUCTS, INC. v. Brotherhood Bank & Trust Co. Law School Study Guide
Use this case brief structure for your own legal analysis. Focus on the IRAC methodology to excel in law school exams and cold calls.
Case Facts & Court Holding
Key Facts & Case Background
Brotherhood Bank & Trust Co. (Bank) issued a standby letter of credit for $175,000 to Carter Petroleum Products, Inc. (Carter) on behalf of its customer, Highway 210, LLC. The letter of credit, dated October 19, 2001, required presentment “no later than June 26, 2002.” It was subject to the UCP and contained a provision requiring any draft to state it was “Drawn under…Letter of Credit #2001-270 dated July 26, 2001,” which was a typographical error referencing a prior, superseded letter. On the expiration date, a Carter representative presented the draft and required documents at 5:05 p.m. The bank’s lobby had closed at 5:00 p.m., but its drive-through remained open until 7:00 p.m. A bank employee admitted the representative and accepted the documents. Carter’s draft correctly referenced the October 19, 2001 date of the operative letter, not the erroneous July date from the letter’s text. The Bank dishonored the draft, citing two reasons: (1) untimely presentment after regular banking hours, and (2) failure to use the exact, albeit incorrect, date language specified in the letter of credit. Carter sued for wrongful dishonor.
Court Holding & Legal Precedent
Issue: Under UCC Article 5, does a beneficiary’s presentation strictly comply with a letter of credit’s terms if it is made after the bank’s lobby closes but while the bank is still open for business, and if it corrects an obvious typographical error created by the issuing bank?
Yes. The court affirmed summary judgment for Carter, holding that the presentment Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui o
IRAC Legal Analysis
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Legal Issue
Under UCC Article 5, does a beneficiary’s presentation strictly comply with a letter of credit’s terms if it is made after the bank’s lobby closes but while the bank is still open for business, and if it corrects an obvious typographical error created by the issuing bank?
Conclusion
This case clarifies that the strict compliance rule in letter of credit Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco lab
Legal Rule
Under K.S.A. 84-5-108 (UCC § 5-108), an issuer must honor a presentation Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatu
Legal Analysis
The court analyzed the Bank's two grounds for dishonor under the framework Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in repr
Flash-to-Full Case Opinions
Flash Summary
- Presentment of a letter of credit after lobby hours but while