KRS 355.5-103: Scope.

(1) This article applies to letters of credit and to certain rights and obligations arising

out of transactions involving letters of credit.

(2) The statement of a rule in this article does not by itself require, imply, or negate

application of the same or a d ifferent rule to a situation not provided for, or to a

person not specified, in this article.

(3) With the exception of this subsection, subsections (1) and (4) of this section, KRS

355.5-102(1)(i) and (j), 355.5 -106(4), and 355.5 -114(4), and except to the extent

prohibited in KRS 355.1 -302 and 355.5 -117(4), the effect of this article may be

varied by agreement or by a provision stated or incorporated by reference in an

undertaking. A term in an agreement or undertaking generally excusing liability or

generally limiting remedies for failure to perform obligations is not sufficient to

vary obligations prescribed by this article.

(4) Rights and obligations of an issuer to a beneficiary or a nominated person under a

letter of credit are independent of the exist ence, performance, or nonperformance of

a contract or arrangement out of which the letter of credit arises or which underlies

it, including contracts or arrangements between the issuer and the applicant and

between the applicant and the beneficiary.