N.Y. UCC Law § 5-108

Section 5--108. Issuer's rights and obligations.\n (a) Except as otherwise provided in section 5--109, an issuer shall\nhonor a presentation that, as determined by the standard practice\nreferred to in subsection (e) of this section, appears on its face\nstrictly to comply with the terms and conditions of the letter of\ncredit. Except as otherwise provided in section 5--113 and unless\notherwise agreed with the applicant, an issuer shall dishonor a\npresentation that does not appear so to comply.\n (b) An issuer has a reasonable time after presentation, but not beyond\nthe end of the seventh business day of the issue after the day of its\nreceipt of documents:\n (1) to honor,\n (2) if the letter of credit provides for honor to be completed\n more than seven business days after presentation, to accept a\n draft or incur a deferred obligation, or\n (3) to give notice to the presenter of discrepancies in the\n presentation.\n (c) Except as otherwise provided in subsection (d) of this section, an\nissuer is precluded from asserting as a basis for dishonor any\ndiscrepancy if timely notice is not given, or any discrepancy not stated\nin the notice if timely notice is given.\n (d) Failure to give the notice specified in subsection (b) of this\nsection or to mention fraud, forgery, or expiration in the notice does\nnot preclude the issuer from asserting as a basis for dishonor fraud or\nforgery as described in subsection (a) of section 5--109 or expiration\nof the letter of credit before presentation.\n (e) An issuer shall observe standard practice of financial\ninstitutions that regularly issue letters of credit.\n (f) An issuer is not responsible for:\n (1) the performance or nonperformance of the underlying contract,\n arrangement, or transaction,\n (2) an act or omission of others, or\n (3) observance or knowledge of the usage of a particular trade\n other than the standard practice referred to in subsection\n (e) of this section.\n (g) If an undertaking constituting a letter of credit under paragraph\n(10) of subsection (a) of section 5--102 contains nondocumentary\nconditions, an issuer shall disregard the nondocumentary conditions and\ntreat them as if they were not stated.\n (h) An issuer that has dishonored a presentation shall return the\ndocuments or hold them at the disposal of, and send advice to that\neffect to, the presenter.\n (i) An issuer that has honored a presentation as permitted or required\nby this article:\n (1) is entitled to be reimbursed by the applicant in immediately\n available funds not later than the date of its payment of\n funds;\n (2) takes the documents free of claims of the beneficiary or\n presenter;\n (3) is precluded from asserting a right of recourse on a draft\n under sections 3--414 and 3--415;\n (4) except as otherwise provided in sections 5--110 and 5--117,\n is precluded from restitution of money paid or other value\n given by mistake to the extent the mistake concerns\n discrepancies in the documents or tender which are apparent\n on the face of the presentation; and\n (5) is discharged to the extent of its performance under the\n letter of credit unless the issuer honored a presentation in\n which a required signature of a beneficiary was forged.\n