Consideration

84-5-105. Consideration. Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or confirmation. History: L. 1996, ch. 202, § 5; July 1. KANSAS COMMENT, 1996 This section is derived from the former 84-5-105 and is identical to the 1995 Official Text. Historical citations may be obtained from the Kansas Comment 1965 and 1983 in the former bound Volumes 7 of the Kansas Statutes Annotated. Although banks normally charge a fee for issuing a letter of credit, absence of consideration in a letter of credit does not affect its validity under the Code. The same was true under the law merchant and there was no evidence that such law had been substantially changed by the courts in the United States. Because consideration is not required, there is one less defense to payment to the beneficiary. The parties can change the terms of the agreement regarding the letter of credit without consideration, but any changes in the underlying obligations between the applicant and the beneficiary may require consideration. Revisor's Note: Former section 84-5-105 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.