Louisiana § 10:9-409 Restrictions on assignment of letter-of-credit rights ineffective

Louisiana Statutes

§ 10:9-409 — Restrictions on assignment of letter-of-credit rights ineffective

Louisiana § 10:9-409

Title 10Commercial Laws

This text of Louisiana § 10:9-409 (Restrictions on assignment of letter-of-credit rights ineffective) is published on Counsel Stack Legal Research, covering Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

La. Stat. Ann. § 10:9-409 (2026).

Text

(a)Term or law restricting assignment generally ineffective. A term in a letter of credit or a statute, regulation, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary's assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or statute, regulation, custom, or practice:

(1)would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or

(2)provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lett

Free access — add to your briefcase to read the full text and ask questions with AI

(a) Term or law restricting assignment generally ineffective. A term in a letter of credit or a statute, regulation, custom, or practice applicable to the letter of credit which prohibits, restricts, or requires the consent of an applicant, issuer, or nominated person to a beneficiary's assignment of or creation of a security interest in a letter-of-credit right is ineffective to the extent that the term or statute, regulation, custom, or practice:
(1) would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or
(2) provides that the assignment or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the letter-of-credit right.
(b) Limitation on ineffectiveness under Subsection (a). To the extent that a term in a letter of credit is ineffective under Subsection (a) but would be effective under law other than this Chapter or a custom or practice applicable to the letter of credit, to the transfer of a right to draw or otherwise demand performance under the letter of credit, or to the assignment of a right to proceeds of the letter of credit, the creation, attachment, or perfection of a security interest in the letter-of-credit right:
(1) is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;
(2) imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and
(3) does not require the applicant, issuer, nominated person, or transferee beneficiary to recognize the security interest, pay or render performance to the secured party, or accept payment or other performance from the secured party.

Legislative History

Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2004, No. 303, §2.