Wisconsin § 409.409 Restrictions on assignment of letter-of-credit rights ineffective.

Wisconsin Statutes

§ 409.409 — Restrictions on assignment of letter-of-credit rights ineffective.

Wisconsin § 409.409

Ch. 409Uniform commercial code — secured transactions

Subch.subch. IV of ch. 409 SUBCHAPTER IV

RIGHTS OF 3RD PARTIES

This text of Wisconsin § 409.409 (Restrictions on assignment of letter-of-credit rights ineffective.) is published on Counsel Stack Legal Research, covering Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Wis. Stat. § 409.409 (2026).

Text

409
409(1) (1) Term or law restricting assignment generally ineffective. A term in a letter of credit or a rule of law, statute, rule, 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 rule of law, statute, rule, custom, or practice:
409(1)(a) (a) Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or
409(1)(b) (b) 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

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409.409
409.409(1) (1) Term or law restricting assignment generally ineffective. A term in a letter of credit or a rule of law, statute, rule, 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 rule of law, statute, rule, custom, or practice:
409.409(1)(a) (a) Would impair the creation, attachment, or perfection of a security interest in the letter-of-credit right; or
409.409(1)(b) (b) 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.
409.409(2) (2) Limitation on ineffectiveness under sub. (1). To the extent that a term in a letter of credit is ineffective under sub. (1) 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:
409.409(2)(a) (a) Is not enforceable against the applicant, issuer, nominated person, or transferee beneficiary;
409.409(2)(b) (b) Imposes no duties or obligations on the applicant, issuer, nominated person, or transferee beneficiary; and
409.409(2)(c) (c) 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.