Indiana § 26-1-4.1-507 Choice of law

Indiana Statutes

§ 26-1-4.1-507 — Choice of law

Indiana § 26-1-4.1-507

Title 26COMMERCIAL LAW

Art. 1UNIFORM COMMERCIAL CODE

Ch. 4.1Fund Transfers

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Bluebook

Ind. Code § 26-1-4.1-507 (2026).

Text

(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 the receiving bank is located.

(2)The rights and obligations between the beneficiary's bank and the beneficiary are governed by the law of the jurisdiction in which the beneficiary's bank is located.

(3)The issue of when payment is made pursuant to a funds transfer by the originator to the beneficiary is governed by the law of the jurisdiction in which the beneficiary's bank is located.

(b)If the parties described in each paragraph of subsection (a) have made an agreement selecting the law of a particular jurisdiction to govern rights and obliga

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(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 the receiving bank is located.
(2) The rights and obligations between the beneficiary's bank and
the beneficiary are governed by the law of the jurisdiction in
which the beneficiary's bank is located.
(3) The issue of when payment is made pursuant to a funds
transfer by the originator to the beneficiary is governed by the law
of the jurisdiction in which the beneficiary's bank is located.
(b) If the parties described in each paragraph of subsection (a) have
made an agreement selecting the law of a particular jurisdiction to
govern rights and obligations between each other, the law of that
jurisdiction governs those rights and obligations, whether or not the
payment order or the funds transfer bears a reasonable relation to that
jurisdiction.
(c) A funds-transfer system rule may select the law of a particular
jurisdiction to govern (i) rights and obligations between participating
banks with respect to payment orders transmitted or processed through
the system, or (ii) the rights and obligations of some or all parties to a
funds transfer any part of which is carried out by means of the system.
A choice of law made pursuant to clause (i) is binding on participating
banks. A choice of law made pursuant to clause (ii) is binding on the
originator, other sender, or a receiving bank having notice that the
funds-transfer system might be used in the funds transfer and of the
choice of law by the system when the originator, other sender, or
receiving bank issued or accepted a payment order. The beneficiary of
a funds transfer is bound by the choice of law if, when the funds
transfer is initiated, the beneficiary has notice that the funds-transfer
system might be used in the funds transfer and of the choice of law by
the system. The law of a jurisdiction selected pursuant to this
subsection may govern, whether or not that law bears a reasonable
relation to the matter in issue.
(d) In the event of inconsistency between an agreement under
subsection (b) and a choice-of-law rule under subsection (c), the
agreement under subsection (b) prevails.
(e) If a funds transfer is made by use of more than one
funds-transfer system and there is inconsistency between choice-of-law
rules of the systems, the matter in issue is governed by the law of the
selected jurisdiction that has the most significant relationship to the
matter in issue.