The court was asked whether a debtor’s liability to his creditor is discharged when the creditor recovers an equivalent amount to the debt from a bank that has provided a standby letter of credit.
Held: they were entitled at common law to collect it from the customer on the ground that they had compulsorily discharged the customer’s liability for the price: ‘ the seller looks to the letter of credit for payment of the price. Thus it is, I think, received wisdom that when an issuing bank honours a letter of credit its payment will discharge the obligation that gave rise to the need for the letter of credit.’
Rimer, McFarlane, Lewison LJJ
[2012] EWCA Civ 640, [2012] 2 All ER (Comm) 1167, [2013] 2 WLR 768, [2013] 1 Ch 400, [2012] 2 Lloyd’s Rep 13, [2012] 4 All ER 160, [2012] 2 BCLC 1, 2012] 2 CLC 240
Bailii
England and Wales
Cited by:
Cited – Bailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
Lists of cited by and citing cases may be incomplete.
Contract
Leading Case
Updated: 01 November 2021; Ref: scu.457752
