Definitions

Definitions. (1) In this division unless the context otherwise requires: (a) “Credit” or “letter of credit” means an engagement by a bank or other person made at the request of a customer and of a kind within the scope of this division (5 CMC § 5102) that the issuer will honor drafts or other demands for payment upon compliance with the conditions specified in the credit. A credit may be either revocable or irrevocable. The engagement may be either an agreement to honor or a statement that the bank or other person is authorized to honor. (b) A “documentary draft” or a “documentary demand for payment” is one honor of which is conditioned upon the presentation of a document or documents. “Document” means any paper including document of title, security, invoice, certificate, notice of default and the like. (c) An “issuer” is a bank or other person issuing a credit. (d) A “beneficiary” of a credit is a person who is entitled under its terms to draw or demand payment. (e) An “advising bank” is a bank which gives notification of the issuance of a credit by another bank. (f) A “confirming bank” is a bank which engages either that it will itself honor a credit already issued by another bank or that such a credit will be honored by the issuer or a third bank. (g) A “customer” is a buyer or other person who causes an issuer to issue a credit. The term also includes a bank which procures issuance or confirmation on behalf of that bank’s customer. (2) Other definitions applying to this division and the sections in which they appear are: “Notation of Credit.” 5 CMC § 5108. “Presenter.” 5 CMC § 5112(3). (3) Definitions in other divisions applying to this division and the sections in which they appear are: “Accept” or “Acceptance.” 5 CMC § 3410. “Contract for sale.” 5 CMC § 2106. “Draft.” 5 CMC § 3104. “Holder in due course.” 5 CMC § 3302. “Midnight deadline.” 5 CMC § 4104. “Security.” 5 CMC § 8102. (4) In addition, division 1 of this title [5 CMC § 1101 et seq.] contains general definitions and principles of construction and interpretation applicable throughout this division. Source: PL 3-56, § 1 (§ 5103).