Title XXIX, Commerce and Trade

(1) Subject to subsection (2) of this section, if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary o…

(1) (a) This subsection applies to a payment order identifying an intermediary bank or the beneficiary's bank only by an identifying number. (b) The receiving bank may rely on the number as the proper identification of the intermediary or beneficiary's bank and need not determine…

(1) Subject to subsection (4), a receiving bank other than the beneficiary's bank accepts a payment order when it executes the order. (2) Subject to subsections (3) and (4), a beneficiary's bank accepts a payment order at the earliest of the following times: (a) When the bank: 1.…

(1) (a) A payment order is rejected by the receiving bank by a notice of rejection transmitted to the sender orally or in a record. (b) A notice of rejection need not use any particular words and is sufficient if it indicates that the receiving bank is rejecting the order or will…

(1) (a) A communication of the sender of a payment order canceling or amending the order may be transmitted to the receiving bank orally or in a record. (b) If a security procedure is in effect between the sender and the receiving bank, the communication is not effective to cance…

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 or in this article, but does not otherwise have any duty to accept a payment order …

(1) 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 executed. (2) "Execution date" of a payment order …

(1) Except as provided in subsections (2) through (4), if the receiving bank accepts a payment order pursuant to KRS 355.4A-209(1), the bank has the following obligations in executing the order: (a) The receiving bank is obliged to issue, on the execution date, a payment order co…

(1) A receiving bank that: (a) 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 (b) Issues a payment order in execution of the sender's order and then issues a duplicate order, is entitled to paymen…

If the sender of a payment order that is erroneously executed as stated in KRS 355.4A- 303 receives notification from the receiving bank that the order was executed or that the sender's account was debited with respect to the order, the sender has a duty to exercise ordinary care…

order. (1) If a funds transfer is completed but execution of a payment order by the receiving bank in breach of KRS 355.4A-302 results in delay in payment to the beneficiary, the bank is obliged to pay interest to either the originator or the beneficiary of the funds transfer for…

"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 received by the beneficiary's …

(1) This section is subject to KRS 355.4A-205 and 355.4A-207. (2) 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 of the order, but payment is not due until the payment date of the…

(1) Payment of the sender's obligation under KRS 355.4A-402 to pay the receiving bank occurs as follows: (a) If the sender is a bank, payment occurs when the receiving bank receives final settlement of the obligation through a Federal Reserve Bank or through a funds-transfer syst…

(1) Subject to KRS 355.4A-211(5), 355.4A-405(4), and 355.4A-405(5), if a beneficiary's bank accepts a payment order, the bank is obliged to pay the amount of the order to the beneficiary of the order. Payment is due on the payment date of the order, but if acceptance occurs on th…

(1) If the beneficiary's bank credits an account of the beneficiary of a payment order, payment of the bank's obligation under KRS 355.4A-404(1) occurs when and to the extent: (a) The beneficiary is notified of the right to withdraw the credit; (b) The bank lawfully applies the c…

obligation. (1) Subject to KRS 355.4A-211(5), 355.4A-405(4), and 355.4A-405(5), the originator of a funds transfer pays the beneficiary of the originator's payment order: (a) At the time a payment order for the benefit of the beneficiary is accepted by the beneficiary's bank in t…

(1) 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. (2) "Funds-transfer system rule" means a rule of an association of banks: (a) Governing transmission of payment orders by …

bank. (1) 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 with respect to an account. (2) This subsection applies to creditor process with res…

For proper cause and in compliance with applicable law, a court may restrain: (1) A person from issuing a payment order to initiate a funds transfer; (2) An originator's bank from executing the payment order of the originator; or (3) The beneficiary's bank from releasing funds to…

- Order of withdrawals from account. (1) If a receiving bank has received more than one (1) payment order of the sender or one (1) or more payment orders and other items that are payable from the sender's account, the bank may charge the sender's account with respect to the vario…

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 reasonably identifying the order, the customer is precluded from asserting that…

(1) 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: (a) By agreement of the sender and receiving bank; or (b) By a funds-transfer system rule if the payment order is tran…

(1) The following rules apply unless the affected parties otherwise agree or subsection (3) applies: (a) 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 the receiving bank is located. (b)…

This article may be cited as Uniform Commercial Code -- Letters of Credit.

(1) In this article: (a) "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. (b) "Applicant" means a person at w…

(1) This article applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. (2) The statement of a rule in this article does not by itself require, imply, or negate application of the same or a different rule to a s…

A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a signed record.

Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation.

(1) 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 credit is revocable only if it so provides. (2) After a letter o…

(1) 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 issuer were an applicant and the confirmer had issued the l…

(1) Except as otherwise provided in KRS 355.5-109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (5) of this section, appears on its face strictly to comply with the terms and conditions of the letter of credit. Except…

(1) 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 fraud by the beneficiary on the is…

(1) If its presentation is honored, the beneficiary warrants: (a) 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 KRS 355.5- 109(1); and (b) To the applicant that the drawing does not viola…

(1) 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 subject of the dishonor or…

If a letter of credit is transferable, the issuer may refuse to recognize or carry out a transfer if: (1) The transfer would violate applicable law; or (2) The transferor or transferee has failed to comply with any requirement stated in the letter of credit or any other requireme…

(1) 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. (2) A successor of a beneficiary may consent to amendments, sign and pr…

(1) 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 does not include a beneficiary's drawing …

An action to enforce a right or obligation arising under this article must be commenced within one (1) year after the expiration date of the relevant letter of credit or one (1) year after the claim for relief accrues, whichever occurs later. A claim for relief accrues when the b…

(1) 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 by the affected parties or by a provision in the person's letter of credit, confirmation, or other …

(1) 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 beneficiary and of the applicant to the same extent as if the issuer were th…

(1) 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. (2) So long as and to the extent that an issuer or nominated person has not bee…

This article may be cited as Uniform Commercial Code -- Documents of Title.

(1) In this article, unless the context otherwise requires: (a) "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; (b) "Carrier" means a person that issues a bill of ladin…

(1) 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. (2) This article does not repeal or modify any law prescribing the form or contents of a documen…

(1) 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. (2) A document of title other than one described in subsection (1) of this section is nonnegotiable. A bill of lading that states that the goods are co…