Benetton Service Corp., an Italian clothing manufacturer, contracted to sell clothing to Benedot, Inc., a retailer in Alabama. Over a period of three years, all of Benetton’s deliveries to Benedot were delivered late and contained nonconforming goods. Benetton promised that future deliveries would be conforming and on time. Relying on this promise, Benedot ordered $81,000 of clothing. In partial payment for the clothing, Benedot arranged for Southland Bank to issue a $61,000 irrevocable letter of credit to Benetton. After receiving the letter of credit, Benetton shipped the goods to Benedot. The goods arrived late and were nonconforming. Will Benedot be successful in suing to enjoin Southland Bank from paying Benetton on the letter of credit?
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