United Bank Ltd. v. Cambridge Sporting Goods Corp.
New York Court of Appeals
360 N.E.2d 943 (1976)
Relevant factsFree
Cambridge (defendant) obtained a letter of credit from Hanover Trust to finance a boxing-glove manufacturing deal with Duke, which was itself financed by Pakistani banks (plaintiffs); after Duke shipped severely defective gloves, Cambridge blocked payment, and the Pakistani banks sued for payment under the letter of credit as holders in due course of Duke's drafts, with the lower courts finding for the banks.
IssueFree
Whether, under the UCC, a bank issuing a letter of credit must honor a draft presented by a holder in due course even if there was fraud in the underlying transaction.