Indiana § 26-1-5.1-114 Proceeds of letter of credit; assignment

Indiana Statutes

§ 26-1-5.1-114 — Proceeds of letter of credit; assignment

Indiana § 26-1-5.1-114

Title 26COMMERCIAL LAW

Art. 1UNIFORM COMMERCIAL CODE

Ch. 5.1Letters of Credit

This text of Indiana § 26-1-5.1-114 (Proceeds of letter of credit; assignment) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ind. Code § 26-1-5.1-114 (2026).

Text

(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 does not include a beneficiary's drawing rights or documents presented by the beneficiary.

(b)A beneficiary may assign its right to part or all of the proceeds of a letter of credit. The beneficiary may do so before presentation as a present assignment of its right to receive proceeds contingent upon its compliance with the terms and conditions of the letter of credit.

(c)An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment.

(d)An issuer or nominated person has no obligatio

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(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 does not include
a beneficiary's drawing rights or documents presented by the
beneficiary.
(b) A beneficiary may assign its right to part or all of the proceeds
of a letter of credit. The beneficiary may do so before presentation as
a present assignment of its right to receive proceeds contingent upon
its compliance with the terms and conditions of the letter of credit.
(c) An issuer or nominated person need not recognize an assignment
of proceeds of a letter of credit until it consents to the assignment.
(d) An issuer or nominated person has no obligation to give or
withhold its consent to an assignment of proceeds of a letter of credit,
but consent may not be unreasonably withheld if the assignee possesses
and exhibits the letter of credit and presentation of the letter of credit
is a condition to honor.
(e) Rights of a transferee beneficiary or nominated person are
independent of the beneficiary's assignment of the proceeds of a letter
of credit and are superior to the assignee's right to the proceeds.
(f) Neither the rights recognized by this section between an assignee
and an issuer, transferee beneficiary, or nominated person nor the
issuer's or nominated person's payment of proceeds to an assignee or a
third person affects the rights between the assignee and any person
other than the issuer, transferee beneficiary, or nominated person. The
mode of creating and perfecting a security interest in or granting an
assignment of a beneficiary's rights to proceeds is governed by IC 26-1-9.1 or other law. Against persons other than the issuer, transferee
beneficiary, or nominated person, the rights and obligations arising
upon the creation of a security interest or other assignment of a
beneficiary's right to proceeds and its perfection are governed by IC 26-1-9.1 or other law.