Title 41 — Uniform Commercial Code

1. With respect to settlement by a bank, the medium and time of settlement may be prescribed by federal reserve regulations or circulars, clearinghouse rules, and the like, or agreement. In the absence of such prescription: a. The medium of settlement is cash or credit to an acco…

1. Any item in or coming into the possession of a payor or collecting bank that suspends payment and which item is not finally paid must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank's customer. 2. If a payor…

1. If an item is presented to and received by a payor bank, the bank is accountable for the amount of: a. A demand item, other than a documentary draft, whether properly payable or not if the bank, in any case in which it is not also the depositary bank, retains the item beyond m…

1. A bank may charge against the account of a customer an item which is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and complies with any agreement between the customer and bank. 2…

1. A customer or any other person authorized to draw on the account may stop payment of any item drawn on the customer's account or close the account by an order to the bank describing the item or account with reasonable certainty received at such time and in such manner as to af…

A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date, but it may charge its customer's account for a payment made thereafter in good faith.

1. A payor or collecting bank's authority to accept, pay, or collect an item, or to account for proceeds of its collection if otherwise effective is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection is …

If a payor bank has paid an item over the stop payment order of the drawer or maker, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent…

When a draft or the relevant instructions require presentment "on arrival", "when goods arrive", or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arr…

This chapter may be cited as the Uniform Commercial Code - Letters of Credit.

1. In this chapter: a. "Adviser" means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed, or amended. b. "Applicant" means a person at whos…

1. This chapter 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 chapter does not by itself require, imply, or negate application of the same or a different rule to a sit…

A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a signed record.

Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation.

1. A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides. 2. After a letter of …

1. A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant and the confirmer had issued the le…

1. Except as otherwise provided in section 41-05-09, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection 5, appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as otherwise pr…

1. If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material fraud by the beneficiary on the iss…

1. If its presentation is honored, the beneficiary warrants: a. To the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind described in subsection 1 of section 41-05-09; and b. To the applicant that the drawing do…

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 …

1. Except as otherwise provided in section 41-05-13, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred. 2. Even if a letter of credit provides that it is t…

1. A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name of the beneficiary without disclosing its status as a successor. 2. A successor of a beneficiary may consent to amendments, sign and pres…

1. In this section, "proceeds of a letter of credit" means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include a beneficiary's drawing r…

An action to enforce a right or obligation arising under this chapter must be commenced within one year after the expiration date of the relevant letter of credit or one year after the claim for relief accrues, whichever occurs later. A claim for relief accrues when the breach oc…

1. The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed by the affected parties or by a provision in the person's letter of credit, confirmation, or other u…

1. An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were the…

1. An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation. 2. So long as and to the extent that an issuer or nominated person has not been …

This chapter may be cited as Uniform Commercial Code - Documents of Title.

1. In this chapter, unless the context otherwise requires: a. "Bailee" means a person that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them. b. "Carrier" means a person that issues a bill of lading. …

1. This chapter is subject to any treaty or statute of the United States or regulatory statute of this state to the extent the treaty, statute, or regulatory statute is applicable. 2. This chapter does not modify or repeal any law prescribing the form or content of a document of …

1. Except as otherwise provided in subsection 3, a document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person. 2. A document of title other than one described in subsection 1 is non-negotiable. A bill of lading that s…

1. Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if: a. The person entitled under the electronic document surrenders control of the …

1. A person has control of an electronic document of title if a system employed for evidencing the transfer of interests in the electronic document reliably establishes that person as the person to which the electronic document was issued or transferred. 2. A system satisfies sub…

1. A warehouse receipt may be issued by any warehouse. 2. If goods, including distilled spirits and agricultural commodities, are stored under a statute requiring a bond against withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt is…

1. A warehouse receipt need not be in any particular form. 2. Unless a warehouse receipt provides for each of the following, the warehouse is liable for damages caused to a person injured by its omission: a. A statement of the location of the warehouse facility where the goods ar…

A party to or purchaser for value in good faith of a document of title, other than a bill of lading, that relies upon the description of the goods in the document may recover from the issuer damages caused by the nonreceipt or misdescription of the goods, except to the extent tha…

1. A warehouse is liable for damages for loss of or injury to the goods caused by its failure to exercise care with regard to the goods that a reasonably careful person would exercise under similar circumstances. Unless otherwise agreed, the warehouse is not liable for damages th…

A buyer in ordinary course of business of fungible goods sold and delivered by a warehouse that is also in the business of buying and selling such goods takes the goods free of any claim under a warehouse receipt even if the receipt is negotiable and has been duly negotiated.

1. A warehouse, by giving notice to the person on whose account the goods are held and any other person known to claim an interest in the goods, may require payment of any charges and removal of the goods from the warehouse at the termination of the period of storage fixed by the…

1. Unless the warehouse receipt provides otherwise, a warehouse shall keep separate the goods covered by each receipt so as to permit at all times identification and delivery of those goods. However, different lots of fungible goods may be commingled. 2. If different lots of fung…

If a blank in a negotiable tangible warehouse receipt has been filled in without authority, a good-faith purchaser for value and without notice of the lack of authority may treat the insertion as authorized. Any other unauthorized alteration leaves any tangible or electronic ware…

1. A warehouse has a lien against the bailor on the goods covered by a warehouse receipt or storage agreement or on the proceeds thereof in its possession for charges for storage or transportation, including demurrage and terminal charges, insurance, labor, or other charges, pres…

1. Except as otherwise provided in subsection 2, a warehouse's lien may be enforced by public or private sale of the goods, in bulk or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in th…

1. The issuer of a through bill of lading, or other document of title embodying an undertaking to be performed in part by a person acting as its agent or by a performing carrier, is liable to any person entitled to recover on the bill or other document for any breach by the other…

1. Unless the bill of lading otherwise provides, a carrier may deliver the goods to a person or destination other than that stated in the bill or may otherwise dispose of the goods, without liability for misdelivery, on instructions from: a. The holder of a negotiable bill; b. Th…

1. Except as customary in international transportation, a tangible bill of lading may not be issued in a set of parts. The issuer is liable for damages caused by violation of this subsection. 2. If a tangible bill of lading is lawfully issued in a set of parts, each of which cont…

1. Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at the request of the consignor, may procure the bill to be issued at destination or at any other place designated in the request. 2. Upon request of any person entitled as against a carr…

An unauthorized alteration or filling in of a blank in a bill of lading leaves the bill enforceable according to its original tenor.

1. A carrier has a lien on the goods covered by a bill of lading or on the proceeds thereof in its possession for charges after the date of the carrier's receipt of the goods for storage or transportation, including demurrage and terminal charges, and for expenses necessary for p…

1. A carrier's lien on goods may be enforced by public or private sale of the goods, in bulk or in packages, at any time or place and on any terms that are commercially reasonable, after notifying all persons known to claim an interest in the goods. The notification must include …