noting'that a letter of credit involves three agreements: the underlying agreement between the bank’s customer and the beneficiary, an agreement between -the bank and its customer to issue the letter of credit, and a *389 third, the letter itself which requires the bank to pay the beneficiary
How later courts described this case
- noting'that a letter of credit involves three agreements: the underlying agreement between the bank’s customer and the beneficiary, an agreement between -the bank and its customer to issue the letter of credit, and a *389 third, the letter itself which requires the bank to pay the beneficiary
- “In this case, the deed was drafted by counsel for [Decedents] and because [the trial court] finds that said deed is ambiguous, it must be construed against them.”
- a transaction involving a letter of credit encompasses three contracts, including a contract between the bank and its customer concerning the letter of credit and the letter of credit itself obligating the bank to pay the beneficiary
- the intent of the parties to a written contract is contained in the writing itself
Written by the judges who cited it.
The opinion
OLSZEWSKI, Judge,
concurring:
We are constrained to concur with the majority that Mr. Rappaport cannot avail himself of the letter of credit. The letter required that Mr. Orleans, as landlord, sign a certificate that his tenants had defaulted on their rent payments. Orleans died and Rappaport bought the property, assuming all of Orleans’s rights. When the same tenants defaulted, Rappaport signed the certification of default as landlord, explaining that he was Orleans’s lawful assignee under the lease.
While common sense would dictate that Rappaport stood in Orleans’s shoes as landlord, the law of letters of credit does not follow the dictates of common sense. Rather, it follows a rule of strict compliance. The letter required Orleans’s signature, and once he died, the letter of credit became worthless. It was Rappaport’s burden to discover this, and because he did not, he cannot blame the Bank for refusing to honor the letter. Such a departure from reasonable expectations might be unconscionable in the realm of consumer transactions. In *208 the sophisticated area of high finance, it is a valid risk-shifting device.
We therefore concur in the result reached, despite its harsh and counter-intuitive appearance.