Also known as: account parties · applicant
Written by attorneys · grounded in primary & secondary sources — see below
The customer who requests a bank to issue a letter of credit and who is obligated to reimburse the issuer for payments made under the credit.
Select any source to read its text and confirm it supports the definition.
Ashford Manufacturing serves as account party when it causes its bank to issue a letter of credit naming the local planning commission as beneficiary to satisfy a conditional zoning approval. After the commission satisfies the stated conditions, it presents a compliant demand. The bank honors the draw and Ashford Manufacturing must reimburse the bank under the reimbursement agreement.
Alliance Holdings acts as account party on a letter of credit issued to secure performance of a supply contract. When the beneficiary threatens to draw despite an alleged breach, Alliance Holdings seeks an injunction. The court evaluates the request without first requiring exhaustion of other remedies.
Artemis Logistics serves as account party when its bank issues a letter of credit demanded by a municipality as a condition for a development permit. After rejecting the demand because it lacks the required nexus, the company faces permit denial. The refusal triggers scrutiny under exactions standards.
Antonio Alvarado acts as account party on a letter of credit posted to secure obligations arising from a commercial lease while applying for bar admission. His failure to disclose prior residences on the character questionnaire leads to denial. The omissions demonstrate lack of candor independent of the credit transaction.
Amber Alonzo serves as account party when her bank issues a letter of credit to guarantee payment under a supply agreement. After discharging student loans in bankruptcy, she applies for bar admission. The discharge is weighed as evidence of financial responsibility in the character evaluation.
Astra Aerospace acts as account party on a letter of credit required by a federal agency to secure performance of a procurement contract. The company challenges an agency rule limiting the form of security. The court reviews the rule under standards requiring reasoned explanation for the restriction.
The account party is also termed the applicant.
Supporting sources
The account party reimburses the issuer for amounts paid under the credit.
Supporting sources
The account party has no direct rights against the beneficiary under the letter of credit. Its rights arise from the underlying contract.
Supporting sources
…there is an end, if not a peremptory mandamus is awarded. The discretion of a court is a legal discretion, not arbitrary; if the applicant makes out a proper case the court are bound to grant it. Mr. Lee read the affidavit of Hazen Kimball stating that on 3 March 1801 he was a clerk in the Department of State and that there…