This month, we're spotlighting the challenges and hard-earned lessons emerging from LC disputes and sanctions enforcement crackdowns. Carter
DCW maintains a list of recently-decided court cases involving commercial letters of credit, standby LCs, demand guarantees, and other trade
Continuing an annual survey written by top legal experts each year since 1992, Carter Klein examines the most significant letter of credit issues emerging from cases decided in 2023.
Applicant Consolidated Electrical Distributors ex parte motion for temporary restraining order against issuer Bank of America.
To support its credit line under an amended distribution agreement for solar panels, Consolidated Electrical Distributors, Inc. (Buyer/Applicant) applied for and caused Bank of America, N.A. (Issuer) to issue a USD 35 million standby letter of credit in favor of United Renewable Energy Co., Ltd. (Seller/Beneficiary). The underlying contract was entered late 2020. By early 2022, the parties grew concerned over potential US tariffs on imported solar panels. Accordingly, the parties agreed to another contract amendment whereby Seller/Beneficiary would be protected from significant losses through higher prices, “but agreed to give [Buyer/Applicant] a rebate if the tariff did not go into effect and the right to cancel certain orders”. The amendment, which Seller/Beneficiary claimed was a “side agreement”, stipulated that the right to cancel orders would not apply to “[a]ny product on the water or arrived in the U.S. … until further clarification.” The price increase was agreed April 2022, and Seller/Beneficiary alleged the agreement “and any cancellation right that might have existed” ended when the US announced a solar panel tariff moratorium.
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