(810 ILCS 5/5-111)
(from Ch. 26, par. 5-111)
(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'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
(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), 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'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.
(Source: P.A. 89-534, eff. 1-1-97.)