Urquhart Lindsay and Company, Limited v. Eastern Bank, Limited

Urquhart Lindsay and Company (Urquhart) (plaintiff) contracted to manufacture and sell machinery to Benjamin Jute Mill Co. (Benjamin), which arranged a letter of credit from Eastern Bank (Eastern) (defendant) authorizing payment upon presentment of an invoice and shipping documents; Eastern paid on two earlier shipment invoices, but when Urquhart's third invoice included an extra charge for increased labor costs, Eastern refused to pay it absent Benjamin's separate agreement. Urquhart sued Eastern for breaching the letter of credit, and Eastern defended on the ground that the underlying sales contract did not allow Urquhart to collect the increased labor costs.