The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
(Cite as: 9A V.S.A. § 5-111)
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§ 5—111. Remedies
(a) 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 repudiation. If the issuer’s obligation under the letter of credit
is not for the payment of money, the claimant may obtain specific performance or,
at the claimant’s election, recover an amount equal to the value of performance from
the issuer. In either case, the claimant may also recover incidental but not consequential
damages. The claimant is not obligated to take action to avoid damages that might
be due from the issuer under this subsection. If, although not obligated to do so,
the claimant avoids damages, the claimant’s recovery from the issuer must be reduced
by the amount of damages avoided. The issuer has the burden of proving the amount
of damages avoided. In the case of repudiation the claimant need not present any document.
(b) If an issuer wrongfully dishonors a draft or demand presented under a letter of credit
or honors a draft or demand in breach of its obligation to the applicant, the applicant
may recover damages resulting from the breach, including incidental but not consequential
damages, less any amount saved as a result of the breach.
(c) If an adviser or nominated person other than a confirmer breaches an obligation under
this article or an issuer breaches an obligation not covered in subsection (a) or
(b) of this section, a person to whom the obligation is owed may recover damages resulting
from the breach, including incidental but not consequential damages, less any amount
saved as a result of the breach. To the extent of the confirmation, a confirmer has
the liability of an issuer specified in this subsection and subsections (a) and (b)
of this section.
(d) An issuer, nominated person, or adviser who is found liable under subsection (a),
(b), or (c) of this section shall pay interest on the amount owed thereunder from
the date of wrongful dishonor or other appropriate date.
(e) Reasonable attorney’s fees and other expenses of litigation must be awarded to the
prevailing party in an action in which a remedy is sought under this article.
(f) Damages that would otherwise be payable by a party for breach of an obligation under
this article may be liquidated by agreement or undertaking, but only in an amount
or by a formula that is reasonable in light of the harm anticipated. (Added 1997, No. 65 (Adj. Sess.), § 1, eff. Jan. 1, 1999.)