                                 CODE OF VIRGINIA

REMEDIES (§ 8.5A-111)

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&#8217;s
obligation under the letter of credit is not for the payment of money, the
claimant may obtain specific performance or, at the claimant&#8217;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&#8217;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 title or an issuer breaches an obligation not covered in
subsection (a) or (b), 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).

d. An issuer, nominated person, or adviser who is found liable under subsection
(a), (b), or (c) shall pay interest on the amount owed thereunder from the date
of wrongful dishonor or other appropriate date.

e. Reasonable attorney&#8217;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 title.

f. Damages that would otherwise be payable by a party for breach of an
obligation under this title 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.

HISTORY: 1997, c. 343.