KRS 355.5-111: Remedies.

(1) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a

letter of credit before presentation, the beneficiary, successor, or nominated person

presenting on its own behalf may recover from the issuer the amount that is the

subject of the dishonor or repudiation. If the issuer's obligation under the letter of

credit is not for the payment of money, the claimant may obtain specific

performance or, at the claimant's election, recover an amount equal to the value of

performance from the issuer. In either case, the claimant may also recover incidental

but not consequential damages. The claimant is not obligated to take action to avoid

damages that might be due from the issuer under this subsection. If, although not

obligated to do so, t he claimant avoids damages, the claimant's recovery from the

issuer must be reduced by the amount of damages avoided. The issuer has the

burden of proving the amount of damages avoided. In the case of repudiation the

claimant need not present any document.

(2) If an issuer wrongfully dishonors a draft or demand presented under a letter of credit

or honors a draft or demand in breach of its obligation to the applicant, the applicant

may recover damages resulting from the breach, including incidental but not

consequential damages, less any amount saved as a result of the breach.

(3) If an adviser or nominated person other than a confirmer breaches an obligation

under this article or an issuer breaches an obligation not covered in subsection (1) or

(2) of this section, a person to whom the obligation is owed may recover damages

resulting from the breach, including incidental but not consequential damages, less

any amount saved as a result of the breach. To the extent of the confirmation, a

confirmer has the liab ility of an issuer specified in this subsection and subsections

(1) and (2) of this section.

(4) An issuer, nominated person, or adviser who is found liable under subsection (1),

(2), or (3) of this section shall pay interest on the amount owed thereunder from the

date of wrongful dishonor or other appropriate date.

(5) Reasonable attorney's fees and other expenses of litigation must be awarded to the

prevailing party in an action in which a remedy is sought under this article.

(6) Damages that would otherw ise be payable by a party for breach of an obligation

under this article may be liquidated by agreement or undertaking, but only in an

amount or by a formula that is reasonable in light of the harm anticipated.