Question II

Under the UCP 600 - the account party (CUC) can’t revoke the L/C or change it provision without permission of beneficiary and your bank. Still, if account party has a reasonable belief that beneficiary will breach the contract or will try to falsify the documents, CUC can bring an action to prevent the issuing bank from paying the L/C. Such situation is described in case Mid-America Tire Inc., v. PTZ Trading Ltd., 768 N.E.2d 619,632-637 (Ohio 2002). If the account party will bring such action into the court of New York (to which law, your bank is subject), then, if the state law relating to fraud on the L/C will apply, then your bank can be prohibited from paying L/C, even, though beneficiary can provide all the requested documents.

Question III

Under the article 15 of UCP 600 (which governs relations between parties as they agreed in the contract), bank is obligated to honor (pay the credit) to the beneficiary if documents, provided by him, comply with the L/C. You must pay, despite breach of contract, because banks do not deals with goods, services or performance of agreement, only with the documents (Article 5 of UCP 600). If contract is breached it’s buyer problem to get recovery by litigation.

Question IV

In case, when Ruritsaw does complete it’s obligation due to the selling agreement and will deliver goods in time to buyer, but will provide your bank with BL that is nonconforming to the terms of L/C, your bank doesn't have to pay. Bank must inform account party (CUC) that there are problems with documents, provided by seller and they doesn’t comply with B/L. If CUC are satisfied with performance of beneficiary due to the agreement, CUC can waive discrepancies between the shipping documents and the L/C. In this case - your bank will oblige your bank to pay to the Ruritsaw.