§ 5113 — Transfer by operation of law

(a) Undisclosed successor.--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) Disclosed successor.--A successor of a beneficiary may consent to amendments, sign and present documents and receive payment or other items of value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection (e), an issuer shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard practice referred to in section 5108(e) (relating to standard practice) or, in the absence of such a practice, compliance with other reasonable procedures sufficient to protect the issuer.

(c) Determination of successor status, signature.--An issuer is not obliged to determine whether a purported successor is a successor of a beneficiary or whether the signature of a purported successor is genuine or authorized.

(d) Effect of honor of presentation by purported successor.--Honor of a purported successor's apparently complying presentation under subsection (a) or (b) has the consequences specified in section 5108(i) (relating to certain consequences of honor) even if the purported successor is not the successor of a beneficiary. Documents signed in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of the beneficiary are forged documents for the purposes of section 5109 (relating to fraud and forgery).

(e) Right to decline to recognize presentation.--An issuer whose rights of reimbursement are not covered by subsection (d) or substantially similar law and any confirmer or nominated person may decline to recognize a presentation under subsection (b).

(f) Change of name.--A beneficiary whose name is changed after the issuance of a letter of credit has the same rights and obligations as a successor of a beneficiary under this section.

Legislative History

Special Provisions in Appendix.See section 28 of Act 18 of 2001 in the appendix to this title for special provisions relating to applicability of transitional provisions. Cross References.Section 5113 is referred to in sections 5108, 5112, 9700 of this title.