Continental Illinois National Bank issued an irrevocable letter of credit on behalf of Bills Coal Co. for
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It is time for Continental to honor its word. Argument for Continental Bank: In this transaction, the bank was merely a middleman, helping to facilitate payment of a contract. Allied has fulfilled its obligations under the contract, and we understand the company’s desire to be paid. Regrettably, Bill’s Coal is bankrupt. No one is going to be paid on this deal. Allied should have researched Bill’s financial status more thoroughly before entering into the agreement. While we sympathize with Allied’s dilemma, it has only itself to blame and cannot expect the bank to act as some sort of insurance company for a deal gone awry.
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Business Law and the Legal Environment
ISBN: 978-1111530600
6th Edition
Authors: Jeffrey F. Beatty, Susan S. Samuelson, Dean A. Bredeson
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