§490:4A-507  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 (i) rights and obligations
between participating banks with respect to payment orders transmitted or
processed through the system, or (ii) 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 pursuant to clause (i) is binding on
participating banks.  A choice of law made pursuant to clause (ii) 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.
[L 1991, c 41, pt of §1]