47-4A507. Choice of law
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 rights and obligations between participating banks with respect to payment orders
transmitted or processed through the system or 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 to govern rights and obligations between participating banks with
respect to payment orders transmitted or processed through the system is binding on
participating banks. A choice of law made to govern 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 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.
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