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99 Banking L.J. 340 (1982)
The Letter of Credit in Court: An Expert Testifies

handle is hein.journals/blj99 and id is 340 raw text is: THE LETTER OF CREDIT IN COURT: AN EXPERT TESTIFIES Boris Kozolchyk* There follows an excerpt of the testimony of Profes- sor Boris Kozolchyk in Ayoub Exports Inc. v. First Na- tional City Bank, No. 78-6277 (El Paso Dist. Ct. Tex., May 8, 1980), litigation involving standards and inci- dents of documentary review by an issuing bank. Profes- sor Kozolchyk's testimony affords a doctrinal and em- pirical review of letter-of-credit law which might not be available in any other format. The controversy was set- tled prior to final appeal, and hence the case is un- reported. Nonetheless, the customer's judgment at the trial level is significant in three critical particulars, viz. (1) negligent review of documents can be a violation of a state's (here Texas) unfair deceptive trade practice statute and consequent treble damages, (2) the funda- mental unit of such damages is the face of the letter, and (3) imputation of the obvious but unprovable causal con- nection between negligent review and customer damage from receipt of nonconforming merchandise. Cross-Examination By Mr. Perrenot Q. I would like to ask you generally about the nature of the letter-of-credit transaction. I believe in your book' you treat it as being three different transactions. Would you elaborate on that, please? A. Yes, well, there is the underlying transaction, which is the transaction between the customer and the beneficiary. Then there is the relationship between the bank and the customer, and * Professor of Law, The University of Arizona, College of Law, Tucson, Arizona. 1 Kozolchyk, Commercial Letters of Credit in the Americas (1966). 340

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