{"data":{"id":"us-ky/krs-355.5-109","jurisdiction":"us-ky","citation":"KRS 355.5-109","heading":"Fraud and forgery.","body":"(1) If a presentation is made that appears on its face strictly to comply with the terms\nand conditions of the letter of credit, but a required document is forged or materially\nfraudulent, or honor of the presentation would facilitate a material fraud by the\nbeneficiary on the issuer or applicant:\n(a) The issuer shall honor the presentation, if honor is demanded by:\n1. A nominated person who has given value in good faith and without\nnotice of forgery or material fraud;\n2. A confirmer who has honored its confirmation in good faith;\n3. A holder in due course of a draft drawn under the letter of credit which\nwas taken after acceptance by the issuer or nominated person; or\n4. An assignee of the issuer's or nominated person's deferred obligation that\nwas taken for value and without notice of forgery or material fraud after\nthe obligation was incurred by the issuer or nominated person; and\n(b) The issuer, acting in good faith, may honor or dishonor the presentation in any\nother case.\n(2) If an applicant claims that a r equired document is forged or materially fraudulent or\nthat honor of the presentation would facilitate a material fraud by the beneficiary on\nthe issuer or applicant, a court of competent jurisdiction may temporarily or\npermanently enjoin the issuer from h onoring a presentation or grant similar relief\nagainst the issuer or other persons only if the court finds that:\n(a) The relief is not prohibited under the law applicable to an accepted draft or\ndeferred obligation incurred by the issuer;\n(b) A beneficiary, issuer, or nominated person who may be adversely affected is\nadequately protected against loss that it may suffer because the relief is\ngranted;\n(c) All of the conditions to entitle a person to the relief under the law of this\nCommonwealth have been met; and\n(d) On the basis of the information submitted to the court, the applicant is more\nlikely than not to succeed under its claim of forgery or material fraud and the\nperson demanding honor does not qualify for protection under subsection\n(1)(a) of this section.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33601","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"f02409b18e400408e82c0abdc0931eb09ead5036b80509f346fcd335778b60a9","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.5-108","next":"us-ky/krs-355.5-110"},"notice":"GroundRules: Original legal text. Not legal advice."}