Title 42a — Title 42a: Uniform Commercial Code

Sec. 42a-4A-209. Acceptance of payment order. (a) Subject to subsection (d), a receiving bank other than the beneficiary's bank accepts a payment order when it executes the order. (b) Subject to subsections (c) and (d), a beneficiary's bank accepts a payment order at the earliest…

Sec. 42a-4A-210. Rejection of payment order. (a) A payment order is rejected by the receiving bank by a notice of rejection transmitted to the sender orally, electronically, or in writing. A notice of rejection need not use any particular words and is sufficient if it indicates t…

Sec. 42a-4A-211. Cancellation and amendment of payment order. (a) A communication of the sender of a payment order cancelling or amending the order may be transmitted to the receiving bank orally, electronically, or in writing. If a security procedure is in effect between the sen…

Sec. 42a-4A-212. Liability and duty of receiving bank regarding unaccepted payment order. If a receiving bank fails to accept a payment order that it is obliged by express agreement to accept, the bank is liable for breach of the agreement to the extent provided in the agreement …

Sec. 42a-4A-301. Execution and execution date. (a) A payment order is “executed” by the receiving bank when it issues a payment order intended to carry out the payment order received by the bank. A payment order received by the beneficiary's bank can be accepted but cannot be exe…

Sec. 42a-4A-302. Obligations of receiving bank in execution of payment order. (a) Except as provided in subsections (b) to (d), inclusive, if the receiving bank accepts a payment order pursuant to subsection (a) of section 42a-4A-209, the bank has the following obligations in exe…

Sec. 42a-4A-303. Erroneous execution of payment order. (a) A receiving bank that (i) executes the payment order of the sender by issuing a payment order in an amount greater than the amount of the sender's order, or (ii) issues a payment order in execution of the sender's order a…

Sec. 42a-4A-304. Duty of sender to report erroneously executed payment order. If the sender of a payment order that is erroneously executed as stated in section 42a-4A-303 receives notification from the receiving bank that the order was executed or that the sender's account was d…

Sec. 42a-4A-305. Liability for late or improper execution or failure to execute payment order. (a) If a funds transfer is completed but execution of a payment order by the receiving bank in breach of section 42a-4A-302 results in delay in payment to the beneficiary, the bank is o…

Sec. 42a-4A-401. Payment date. “Payment date” of a payment order means the day on which the amount of the order is payable to the beneficiary by the beneficiary's bank. The payment date may be determined by instruction of the sender but cannot be earlier than the day the order is…

Sec. 42a-4A-402. Obligation of sender to pay receiving bank. (a) This section is subject to sections 42a-4A-205 and 42a-4A-207. (b) With respect to a payment order issued to the beneficiary's bank, acceptance of the order by the bank obliges the sender to pay the bank the amount …

Sec. 42a-4A-403. Payment by sender to receiving bank. (a) Payment of the sender's obligation under section 42a-4A-402 to pay the receiving bank occurs as follows: (1) If the sender is a bank, payment occurs when the receiving bank receives final settlement of the obligation throu…

Sec. 42a-4A-404. Obligation of beneficiary's bank to pay and give notice to beneficiary. (a) Subject to subsection (e) of section 42a-4A-211 and subsections (d) and (e) of section 42a-4A-405, if a beneficiary's bank accepts a payment order, the bank is obliged to pay the amount o…

Sec. 42a-4A-405. Payment by beneficiary's bank to beneficiary. (a) If the beneficiary's bank credits an account of the beneficiary of a payment order, payment of the bank's obligation under subsection (a) of section 42a-4A-404 occurs when and to the extent (i) the beneficiary is …

Sec. 42a-4A-406. Payment by originator to beneficiary; discharge of underlying obligation. (a) Subject to subsection (e) of section 42a-4A-211 and subsections (d) and (e) of section 42a-4A-405, the originator of a funds transfer pays the beneficiary of the originator's payment or…

Sec. 42a-4A-501. Variation by agreement and effect of funds-transfer system rule. (a) Except as otherwise provided in this article, the rights and obligations of a party to a funds transfer may be varied by agreement of the affected party. (b) “Funds-transfer system rule” means a…

Sec. 42a-4A-502. Creditor process served on receiving bank; set-off by beneficiary's bank. (a) As used in this section, “creditor process” means levy, attachment, garnishment, notice of lien, sequestration, or similar process issued by or on behalf of a creditor or other claimant…

Sec. 42a-4A-503. Injunction or restraining order with respect to funds transfer. For proper cause and in compliance with applicable law, a court may restrain (i) a person from issuing a payment order to initiate a funds transfer, (ii) an originator's bank from executing the payme…

Sec. 42a-4A-504. Order in which items and payment orders may be charged to account; order of withdrawals from account. (a) If a receiving bank has received more than one payment order of the sender or one or more payment orders and other items that are payable from the sender's a…

Sec. 42a-4A-505. Preclusion of objection to debit of customer's account. If a receiving bank has received payment from its customer with respect to a payment order issued in the name of the customer as sender and accepted by the bank, and the customer received notification reason…

Sec. 42a-4A-506. Rate of interest. (a) If, under this article, a receiving bank is obliged to pay interest with respect to a payment order issued to the bank, the amount payable may be determined (i) by agreement of the sender and receiving bank, or (ii) by a funds-transfer syste…

Sec. 42a-4A-507. Choice of law. (a) The following rules apply unless the affected parties otherwise agree or subsection (c) applies: (1) The rights and obligations between the sender of a payment order and the receiving bank are governed by the law of the jurisdiction in which th…

Sec. 42a-5-101. Short title: Uniform Commercial Code–Letters of Credit. This article may be cited as “Uniform Commercial Code–Letters of Credit”. (1959, P.A. 133, S. 5-101; P.A. 96-198, S. 1.) History: P.A. 96-198 deleted “shall be known and” after “This article”. Cited. 173 C. 4…

Sec. 42a-5-102. Definitions. (a) In this article: (1) “Adviser” means a person who, at the request of the issuer, a confirmer or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed or amended. (2) “App…

Sec. 42a-5-103. Scope. (a) This article applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. (b) The statement of a rule in this article does not by itself require, imply or negate application of the same or a…

Sec. 42a-5-104. Formal requirements. A letter of credit, confirmation, advice, transfer, amendment or cancellation may be issued in any form that is a record and is authenticated (i) by a signature, or (ii) in accordance with the agreement of the parties or the standard practice …

Sec. 42a-5-105. Consideration. Consideration is not required to issue, amend, transfer or cancel a letter of credit, advice or confirmation. (1959, P.A. 133, S. 5-105; P.A. 96-198, S. 5.) History: P.A. 96-198 rephrased provisions. Cited. 173 C. 492.

Sec. 42a-5-106. Issuance, amendment, cancellation and duration. (a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of …

Sec. 42a-5-107. Confirmer, nominated person and adviser. (a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the is…

Sec. 42a-5-108. Issuer's rights and obligations. (a) Except as otherwise provided in section 42a-5-109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (e) of this section, appears on its face strictly to comply with the…

Sec. 42a-5-109. Fraud and forgery. (a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material…

Sec. 42a-5-110. Warranties. (a) If its presentation is honored, the beneficiary warrants: (1) To the issuer, any other person to whom presentation is made and the applicant that there is no fraud or forgery of the kind described in subsection (a) of section 42a-5-109; and (2) to …

Sec. 42a-5-111. Remedies. (a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor or nominated person presenting on its own behalf may recover from the issuer the amount that is the s…

Sec. 42a-5-112. Transfer of letter of credit. (a) Except as otherwise provided in section 42a-5-113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred. (b)…

Sec. 42a-5-113. Transfer by operation of law. (a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name of the beneficiary without disclosing its status as a successor. (b) A successor of a bene…

Sec. 42a-5-114. Assignment of proceeds. (a) In this section, “proceeds of a letter of credit” means the cash, check, accepted draft or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term do…

Sec. 42a-5-115. Statute of limitations. An action to enforce a right or obligation arising under this article must be commenced within one year after the expiration date of the relevant letter of credit or one year after the cause of action accrues, whichever occurs later. A caus…

Sec. 42a-5-116. Choice of law and forum. (a) The liability of an issuer, nominated person or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the m…

Sec. 42a-5-117. Subrogation of issuer, applicant and nominated person. (a) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the benef…

Sec. 42a-5-118. Security interest of issuer or nominated person. (a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation. (b) So long as…

Sec. 42a-5-118a. Applicability. Public act 96-198* applies to a letter of credit that is issued on or after October 1, 1996. Public act 96-198* does not apply to a transaction, event, obligation or duty arising out of or associated with a letter of credit that was issued before O…

Sec. 42a-5-119. Savings clause. A transaction arising out of or associated with a letter of credit that was issued before October 1, 1996, and the rights, obligations and interests flowing from that transaction are governed by any statute or other law amended or repealed by publi…

Secs. 42a-6-101 to 42a-6-110a. Uniform Commercial Code–Bulk Transfers. Sections 42a-6-101 to 42a-6-110a, inclusive, are repealed. (1959, P.A. 133, S. 6-101–6-110; 1961, P.A. 116, S. 5, 6; 1963, P.A. 526, S. 10–13; February, 1965, P.A. 377, S. 4; 1967, P.A. 898; 1969, P.A. 554; 19…

Sec. 42a-6-110b. Validity and enforceability of rights and obligations arising under former provisions on bulk transfers. Rights and obligations that arose under sections 42a-6-101 to 42a-6-110a, inclusive, and section 42a-9-111 before their repeal on October 1, 1993, remain vali…

Sec. 42a-7-101. Short title: Uniform Commercial Code–Documents of Title. This article may be cited as “Uniform Commercial Code–Documents of Title”. (1959, P.A. 133, S. 7-101; P.A. 04-64, S. 1.) History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial C…

Sec. 42a-7-102. Definitions and index of definitions. (a) In this article, unless the context otherwise requires: (1) “Bailee” means a person that by a warehouse receipt, bill of lading or other document of title acknowledges possession of goods and contracts to deliver them. (2)…

Sec. 42a-7-103. Relation of article to treaty or statute. (a) This article is subject to any treaty or statute of the United States or a regulatory statute of this state to the extent the treaty, statute or regulatory statute is applicable. (b) This article does not modify or rep…

Sec. 42a-7-104. Negotiable and nonnegotiable document of title. (a) Except as otherwise provided in subsection (c) of this section, a document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person. (b) A document of title…

Sec. 42a-7-105. Reissuance in alternative medium. (a) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if: (1) The person entitled unde…

Sec. 42a-7-106. Control of electronic document of title. (a) A person has control of an electronic document of title if a system employed for evidencing the transfer of interests in the electronic document reliably establishes that person as the person to which the electronic doc…