CHAPTER 5.1. LETTERS OF CREDIT
IC 26-1-5.1
Chapter 5.1. Letters of Credit
IC 26-1-5.1-101
Short title; scope
Sec. 101. (a) IC 26-1-5.1 shall be known and may be cited asUniform Commercial Code . Letters of Credit.
(b) IC 26-1-5.1 applies to a letter of credit that is issued after June30, 1996, and does not apply to a transaction, event, obligation, orduty arising out of or associated with a letter of credit that was issuedbefore July 1, 1996.
(c) A transaction arising out of or associated with a letter of creditthat was issued before July 1, 1996, and the rights, obligations, andinterests flowing from that transaction:
(1) are governed by IC 26-1-5 (before its repeal) and any otherlaw amended by senate enrolled act 193 of the 1996 regularsession of the general assembly as if repeal or amendment hadnot occurred; and
(2) may be terminated, completed, consummated, or enforcedunder IC 26-1-5 (before its repeal) or other law (before itsamendment by senate enrolled act 193 of the 1996 regularsession of the general assembly).
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-102
Definitions
Sec. 102. (a) In IC 26-1-5.1:
(1) "Adviser" means a person who, at the request of the issuer,a confirmer, or another adviser, notifies or requests anotheradviser to notify the beneficiary that a letter of credit has beenissued, confirmed, or amended.
(2) "Applicant" means a person at whose request or for whoseaccount a letter of credit is issued. The term includes a personwho requests an issuer to issue a letter of credit on behalf ofanother if the person making the request undertakes anobligation to reimburse the issuer.
(3) "Beneficiary" means a person who under the terms of aletter of credit is entitled to have its complying presentationhonored. The term includes a person to whom drawing rightshave been transferred under a transferable letter of credit.
(4) "Confirmer" means a nominated person who undertakes, atthe request or with the consent of the issuer, to honor apresentation under a letter of credit issued by another.
(5) "Dishonor" of a letter of credit means failure timely to honoror to take an interim action, such as acceptance of a draft, thatmay be required by the letter of credit.
(6) "Document" means a draft or other demand, document oftitle, investment security, certificate, invoice, or other record,statement, or representation of fact, law, right, or opinion whichis: (i) presented in a written or other medium permitted by theletter of credit or, unless prohibited by the letter of credit, bythe standard practice referred to in IC 26-1-5.1-108(e); and
(ii) capable of being examined for compliance with the termsand conditions of the letter of credit.
A document may not be oral.
(7) "Good faith" means honesty in fact in the conduct ortransaction concerned.
(8) "Honor" of a letter of credit means performance of theissuer's undertaking in the letter of credit to pay or deliver anitem of value. Unless the letter of credit otherwise provides,"honor" occurs:
(i) upon payment;
(ii) if the letter of credit provides for acceptance, uponacceptance of a draft and, at maturity, its payment; or
(iii) if the letter of credit provides for incurring a deferredobligation, upon incurring the obligation and, at maturity, itsperformance.
(9) "Issuer" means a bank or other person that issues a letter ofcredit, but does not include an individual who makes anengagement for personal, family, or household purposes.
(10) "Letter of credit" means a definite undertaking thatsatisfies the requirements of IC 26-1-5.1-104 by an issuer to abeneficiary at the request or for the account of an applicant or,in the case of a financial institution, to itself or for its ownaccount, to honor a documentary presentation by payment ordelivery of an item of value.
(11) "Nominated person" means a person whom the issuer:
(i) designates or authorizes to pay, accept, negotiate, orotherwise give value under a letter of credit; and
(ii) undertakes by agreement or custom and practice toreimburse.
(12) "Presentation" means delivery of a document to an issueror nominated person for honor or giving of value under a letterof credit.
(13) "Presenter" means a person making a presentation as or onbehalf of a beneficiary or nominated person.
(14) "Record" means information that is inscribed on a tangiblemedium, or that is stored in an electronic or other medium andis retrievable in perceivable form.
(15) "Successor of a beneficiary" means a person who succeedsto substantially all of the rights of a beneficiary by operation oflaw, including a corporation with or into which the beneficiaryhas been merged or consolidated, an administrator, an executor,a personal representative, a trustee in bankruptcy, a debtor inpossession, a liquidator, and a receiver.
(b) Other definitions applying to IC 26-1-5.1 and the sections inwhich they appear are:
"Accept" or "Acceptance". IC 26-1-3.1-409.
"Value". IC 26-1-3.1-303 and IC 26-1-4-211. (c) IC 26-1 contains certain additional general definitions andprinciples of construction and interpretation applicable throughoutIC 26-1-5.1.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-103
Applicability to IC 26-1-8.1; ability to vary by agreement;independence of rights and obligations under letter of credit
Sec. 103. (a) IC 26-1-8.1 applies to letters of credit and to certainrights and obligations arising out of transactions involving letters ofcredit.
(b) The statement of a rule in IC 26-1-5.1 does not by itselfrequire, imply, or negate application of the same or a different ruleto a situation not provided for, or to a person not specified, inIC 26-1-5.1.
(c) With the exception of this subsection, subsections (a) and (d),IC 26-1-5.1-102(a)(9) and IC 26-1-5.1-102(a)(10),IC 26-1-5.1-106(d), and IC 26-1-5.1-114(d), and except to the extentprohibited in IC 26-1-1-102(3) and IC 26-1-5.1-117(d), the effect ofIC 26-1-5.1 may be varied by agreement or by a provision stated orincorporated by reference in an undertaking. A term in an agreementor undertaking generally excusing liability or generally limitingremedies for failure to perform obligations is not sufficient to varyobligations prescribed by IC 26-1-5.1.
(d) Rights and obligations of an issuer to a beneficiary or anominated person under a letter of credit are independent of theexistence, performance, or nonperformance of a contract orarrangement out of which the letter of credit arises or whichunderlies it, including contracts or arrangements between the issuerand the applicant and between the applicant and the beneficiary.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-104
Formal requirements; signing or standard practice
Sec. 104. A letter of credit, confirmation, advice, transfer,amendment, or cancellation may be issued in any form that is arecord and is authenticated:
(i) by a signature; or
(ii) in accordance with the agreement of the parties or thestandard practice referred to in IC 26-1-5.1-108(e).
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-105
Consideration
Sec. 105. Consideration is not required to issue, amend, transfer,or cancel a letter of credit, advice, or confirmation.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-106
Time and effect of establishment of credit; expiration Sec. 106. (a) A letter of credit is issued and becomes enforceableaccording to its terms against the issuer when the issuer sends orotherwise transmits it to the person requested to advise or to thebeneficiary. A letter of credit is revocable only if it so provides.
(b) After a letter of credit is issued, rights and obligations of abeneficiary, applicant, confirmer, and issuer are not affected by anamendment or cancellation to which that person has not consentedexcept to the extent the letter of credit provides that it is revocable orthat the issuer may amend or cancel the letter of credit without thatconsent.
(c) If there is no stated expiration date or other provision thatdetermines its duration, a letter of credit expires one (1) year after itsstated date of issuance or, if none is stated, after the date on whichit is issued.
(d) A letter of credit that states that it is perpetual expires five (5)years after its stated date of issuance, or if none is stated, after thedate on which it is issued.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-107
Confirmation; advice of credit; error in statement terms; notice totransfer beneficiary
Sec. 107. (a) A confirmer is directly obligated on a letter of creditand has the rights and obligations of an issuer to the extent of itsconfirmation. The confirmer also has rights against and obligationsto the issuer as if the issuer were an applicant and the confirmer hadissued the letter of credit at the request and for the account of theissuer.
(b) A nominated person who is not a confirmer is not obligated tohonor or otherwise give value for a presentation.
(c) A person requested to advise may decline to act as an adviser.An adviser that is not a confirmer is not obligated to honor or givevalue for a presentation. An adviser undertakes to the issuer and tothe beneficiary accurately to advise the terms of the letter of credit,confirmation, amendment, or advice received by that person andundertakes to the beneficiary to check the apparent authenticity ofthe request to advise. Even if the advice is inaccurate, the letter ofcredit, confirmation, or amendment is enforceable as issued.
(d) A person who notifies a transferee beneficiary of the terms ofa letter of credit, confirmation, amendment, or advice has the rightsand obligations of an adviser under subsection (c). The terms in thenotice to the transferee beneficiary may differ from the terms in anynotice to the transferor beneficiary to the extent permitted by theletter of credit, confirmation, amendment, or advice received by theperson who so notifies.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-108
Issuer's duty and privilege to honor; standard practice; issuer'srights upon honor of presentation Sec. 108. (a) Except as otherwise provided in IC 26-1-5.1-109, anissuer shall honor a presentation that, as determined by the standardpractice referred to in subsection (e), appears on its face strictly tocomply with the terms and conditions of the letter of credit. Exceptas otherwise provided in IC 26-1-5.1-113 and unless otherwiseagreed with the applicant, an issuer shall dishonor a presentation thatdoes not appear so to comply.
(b) An issuer has a reasonable time after presentation, but notbeyond the end of the seventh business day of the issuer after the dayof its receipt of documents:
(1) to honor;
(2) if the letter of credit provides for honor to be completedmore than seven (7) business days after presentation, to accepta draft or incur a deferred obligation; or
(3) to give notice to the presenter of discrepancies in thepresentation.
(c) Except as otherwise provided in subsection (d), an issuer isprecluded from asserting as a basis for dishonor any discrepancy iftimely notice is not given, or any discrepancy not stated in the noticeif timely notice is given.
(d) Failure to give the notice specified in subsection (b) or tomention fraud, forgery, or expiration in the notice does not precludethe issuer from asserting as a basis for dishonor fraud or forgery asdescribed in IC 26-1-5.1-109(a) or expiration of the letter of creditbefore presentation.
(e) An issuer shall observe standard practice of financialinstitutions that regularly issue letters of credit. Determination of theissuer's observance of the standard practice is a matter ofinterpretation for the court. The court shall offer the parties areasonable opportunity to present evidence of the standard practice.
(f) An issuer is not responsible for:
(1) the performance or nonperformance of the underlyingcontract, arrangement, or transaction;
(2) an act or omission of others; or
(3) observance or knowledge of the usage of a particular tradeother than the standard practice referred to in subsection (e).
(g) If an undertaking constituting a letter of credit underIC 26-1-5.1-102(a)(10) contains nondocumentary conditions, anissuer shall disregard the nondocumentary conditions and treat themas if they were not stated.
(h) An issuer that has dishonored a presentation shall return thedocuments or hold them at the disposal of, and send advice to thateffect to, the presenter.
(i) An issuer that has honored a presentation as permitted orrequired by IC 26-1-5.1:
(1) is entitled to be reimbursed by the applicant in immediatelyavailable funds not later than the date of its payment of funds;
(2) takes the documents free of claims of the beneficiary orpresenter;
(3) is precluded from asserting a right of recourse on a draft
under IC 26-1-3.1-414 and IC 26-1-3.1-415;
(4) except as otherwise provided in IC 26-1-5.1-110 andIC 26-1-5.1-117, is precluded from restitution of money paid orother value given by mistake to the extent the mistake concernsdiscrepancies in the documents or tender which are apparent onthe face of the presentation; and
(5) is discharged to the extent of its performance under theletter of credit unless the issuer honored a presentation in whicha required signature of a beneficiary was forged.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-109
Fraud and forgery
Sec. 109. (a) If a presentation is made that appears on its facestrictly to comply with the terms and conditions of the letter ofcredit, but a required document is forged or materially fraudulent, orhonor of the presentation would facilitate a material fraud by thebeneficiary on the issuer or applicant:
(1) the issuer shall honor the presentation, if honor is demandedby:
(i) a nominated person who has given value in good faith andwithout notice of forgery or material fraud;
(ii) a confirmer who has honored its confirmation in goodfaith;
(iii) a holder in due course of a draft drawn under the letterof credit which was taken after acceptance by the issuer ornominated person; or
(iv) an assignee of the issuer's or nominated person'sdeferred obligation that was taken for value and withoutnotice of forgery or material fraud after the obligation wasincurred by the issuer or nominated person; and
(2) the issuer, acting in good faith, may honor or dishonor thepresentation in any other case.
(b) If an applicant claims that a required document is forged ormaterially fraudulent or that honor of the presentation wouldfacilitate a material fraud by the beneficiary on the issuer orapplicant, a court of competent jurisdiction may temporarily orpermanently enjoin the issuer from honoring a presentation or grantsimilar relief against the issuer or other persons only if the courtfinds that:
(1) the relief is not prohibited under the law applicable to anaccepted draft or deferred obligation incurred by the issuer;
(2) a beneficiary, issuer, or nominated person who may beadversely affected is adequately protected against loss that itmay suffer because the relief is granted;
(3) all of the conditions to entitle a person to the relief under thelaw of Indiana have been met; and
(4) on the basis of the information submitted to the court, theapplicant is more likely than not to succeed under its claim offorgery or material fraud and the person demanding honor does
not qualify for protection under subsection (a)(1).
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-110
Warranties on transfer and presentment
Sec. 110. (a) If its presentation is honored, the beneficiarywarrants:
(1) to the issuer, any other person to whom presentation ismade, and the applicant that there is no fraud or forgery of thekind described in IC 26-1-5.1-109(a); and
(2) to the applicant that the drawing does not violate anyagreement between the applicant and beneficiary or any otheragreement intended by them to be augmented by the letter ofcredit.
(b) The warranties in subsection (a) are in addition to warrantiesarising under IC 26-1-3.1, IC 26-1-4, IC 26-1-7, and IC 26-1-8.1because of the presentation or transfer of documents covered by anyof those articles.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-111
Remedies for wrongful dishonor, repudiation, or breach ofobligation
Sec. 111. (a) If an issuer wrongfully dishonors or repudiates itsobligation to pay money under a letter of credit before presentation,the beneficiary, successor, or nominated person presenting on its ownbehalf may recover from the issuer the amount that is the subject ofthe dishonor or repudiation. If the issuer's obligation under the letterof credit is not for the payment of money, the claimant may obtainspecific performance or, at the claimant's election, recover an amountequal to the value of performance from the issuer. In either case, theclaimant may also recover incidental but not consequential damages.The claimant is not obligated to take action to avoid damages thatmight be due from the issuer under this subsection. If, although notobligated to do so, the claimant avoids damages, the claimant'srecovery from the issuer must be reduced by the amount of damagesavoided. The issuer has the burden of proving the amount of damagesavoided. In the case of repudiation the claimant need not present anydocument.
(b) If an issuer wrongfully dishonors a draft or demand presentedunder a letter of credit or honors a draft or demand in breach of itsobligation to the applicant, the applicant may recover damagesresulting from the breach, including incidental but not consequentialdamages, less any amount saved as a result of the breach.
(c) If an adviser or nominated person other than a confirmerbreaches an obligation under IC 26-1-5.1 or an issuer breaches anobligation not covered in subsection (a) or (b), a person to whom theobligation is owed may recover damages resulting from the breach,including incidental but not consequential damages, less any amountsaved as a result of the breach. To the extent of the confirmation, a
confirmer has the liability of an issuer specified in this subsectionand subsections (a) and (b).
(d) An issuer, nominated person, or adviser who is found liableunder subsection (a), (b), or (c) shall pay interest on the amountowed thereunder from the date of wrongful dishonor or otherappropriate date.
(e) Reasonable attorney's fees and other expenses of litigationmust be awarded to the prevailing party in an action in which aremedy is sought under IC 26-1-5.1.
(f) Damages that would otherwise be payable by a party forbreach of an obligation under IC 26-1-5.1 may be liquidated byagreement or undertaking, but only in an amount or by a formula thatis reasonable in light of the harm anticipated.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-112
Transferability
Sec. 112. (a) Except as otherwise provided in IC 26-1-5.1-113,unless a letter of credit provides that it is transferable, the right of abeneficiary to draw or otherwise demand performance under a letterof credit may not be transferred.
(b) Even if a letter of credit provides that it is transferable, theissuer may refuse to recognize or carry out a transfer if:
(1) the transfer would violate applicable law; or
(2) the transferor or transferee has failed to comply with anyrequirement stated in the letter of credit or any otherrequirement relating to transfer imposed by the issuer which iswithin the standard practice referred to in IC 26-1-5.1-108(e) oris otherwise reasonable under the circumstances.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-113
Successors of beneficiaries; rights; recognition
Sec. 113. (a) A successor of a beneficiary may consent toamendments, sign and present documents, and receive payment orother items of value in the name of the beneficiary without disclosingits status as a successor.
(b) A successor of a beneficiary may consent to amendments, signand present documents, and receive payment or other items of valuein its own name as the disclosed successor of the beneficiary. Exceptas otherwise provided in subsection (e), an issuer shall recognize adisclosed successor of a beneficiary as beneficiary in full substitutionfor its predecessor upon compliance with the requirements forrecognition by the issuer of a transfer of drawing rights by operationof law under the standard practice referred to in IC 26-1-5.1-108(e)or, in the absence of such a practice, compliance with otherreasonable procedures sufficient to protect the issuer.
(c) An issuer is not obliged to determine whether a purportedsuccessor is a successor of a beneficiary or whether the signature ofa purported successor is genuine or authorized. (d) Honor of a purported successor's apparently complyingpresentation under subsection (a) or (b) has the consequencesspecified in IC 26-1-5.1-108(i) even if the purported successor is notthe successor of a beneficiary. Documents signed in the name of thebeneficiary or of a disclosed successor by a person who is neither thebeneficiary nor the successor of the beneficiary are forged documentsfor the purposes of IC 26-1-5.1-109.
(e) An issuer whose rights of reimbursement are not covered bysubsection (d) or substantially similar law and any confirmer ornominated person may decline to recognize a presentation undersubsection (b).
(f) A beneficiary whose name is changed after the issuance of aletter of credit has the same rights and obligations as a successor ofa beneficiary under this section.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-114
Proceeds of letter of credit; assignment
Sec. 114. (a) In this section, "proceeds of a letter of credit" meansthe cash, check, accepted draft, or other item of value paid ordelivered upon honor or giving of value by the issuer or anynominated person under the letter of credit. The term does notinclude a beneficiary's drawing rights or documents presented by thebeneficiary.
(b) A beneficiary may assign its right to part or all of the proceedsof a letter of credit. The beneficiary may do so before presentationas a present assignment of its right to receive proceeds contingentupon its compliance with the terms and conditions of the letter ofcredit.
(c) An issuer or nominated person need not recognize anassignment of proceeds of a letter of credit until it consents to theassignment.
(d) An issuer or nominated person has no obligation to give orwithhold its consent to an assignment of proceeds of a letter ofcredit, but consent may not be unreasonably withheld if the assigneepossesses and exhibits the letter of credit and presentation of theletter of credit is a condition to honor.
(e) Rights of a transferee beneficiary or nominated person areindependent of the beneficiary's assignment of the proceeds of aletter of credit and are superior to the assignee's right to the proceeds.
(f) Neither the rights recognized by this section between anassignee and an issuer, transferee beneficiary, or nominated personnor the issuer's or nominated person's payment of proceeds to anassignee or a third person affects the rights between the assignee andany person other than the issuer, transferee beneficiary, or nominatedperson. The mode of creating and perfecting a security interest in orgranting an assignment of a beneficiary's rights to proceeds isgoverned by IC 26-1-9.1 or other law. Against persons other than theissuer, transferee beneficiary, or nominated person, the rights andobligations arising upon the creation of a security interest or other
assignment of a beneficiary's right to proceeds and its perfection aregoverned by IC 26-1-9.1 or other law.
As added by P.L.183-1996, SEC.4. Amended by P.L.57-2000,SEC.30.
IC 26-1-5.1-115
Statute of limitations
Sec. 115. An action to enforce a right or obligation arising underIC 26-1-5.1 must be commenced within one (1) year after theexpiration date of the relevant letter of credit or one (1) year after thecause of action accrues, whichever occurs later. A cause of actionaccrues when the breach occurs, regardless of the aggrieved party'slack of knowledge of the breach.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-116
Applicable law regarding liability of issuer; choice of forum
Sec. 116. (a) The liability of an issuer, nominated person, oradviser for action or omission is governed by the law of thejurisdiction chosen by an agreement in the form of a record signed orotherwise authenticated by the affected parties in the mannerprovided in IC 26-1-5.1-104 or by a provision in the person's letterof credit, confirmation, or other undertaking. The jurisdiction whoselaw is chosen need not bear any relation to the transaction.
(b) Unless subsection (a) applies, the liability of an issuer,nominated person, or adviser for action or omission is governed bythe law of the jurisdiction in which the person is located. The personis considered to be located at the address indicated in the person'sundertaking. If more than one (1) address is indicated, the person isconsidered to be located at the address from which the person'sundertaking was issued. For the purpose of jurisdiction, choice oflaw, and recognition of interbranch letters of credit, but notenforcement of a judgment, all branches of a bank are consideredseparate juridical entities and a bank is considered to be located atthe place where its relevant branch is considered to be located underthis subsection.
(c) Except as otherwise provided in this subsection, the liabilityof an issuer, nominated person, or adviser is governed by any rulesof custom or practice, such as the Uniform Customs and Practice forDocumentary Credits, to which the letter of credit, confirmation, orother undertaking is expressly made subject. If:
(i) IC 26-1-5.1 would govern the liability of an issuer,nominated person, or adviser under subsection (a) or (b);
(ii) the relevant undertaking incorporates rules of custom orpractice; and
(iii) there is conflict between IC 26-1-5.1 and those rules asapplied to that undertaking;
those rules govern except to the extent of any conflict with thenonvariable provisions specified in IC 26-1-5.1-103(c).
(d) If there is conflict between IC 26-1-5.1 and IC 26-1-3.1,
IC 26-1-4, IC 26-1-4.1, or IC 26-1-9.1, IC 26-1-5.1 governs.
(e) The forum for settling disputes arising out of an undertakingwithin IC 26-1-5.1 may be chosen in the manner and with the bindingeffect that governing law may be chosen in accordance withsubsection (a).
As added by P.L.183-1996, SEC.4. Amended by P.L.57-2000,SEC.31.
IC 26-1-5.1-117
Rights of subrogation
Sec. 117. (a) An issuer that honors a beneficiary's presentation issubrogated to the rights of the beneficiary to the same extent as if theissuer were a secondary obligor of the underlying obligation owed tothe beneficiary and of the applicant to the same extent as if the issuerwere the secondary obligor of the underlying obligation owed to theapplicant.
(b) An applicant that reimburses an issuer is subrogated to therights of the issuer against any beneficiary, presenter, or nominatedperson to the same extent as if the applicant were the secondaryobligor of the obligations owed to the issuer and has the rights ofsubrogation of the issuer to the rights of the beneficiary stated insubsection (a).
(c) A nominated person who pays or gives value against a draft ordemand presented under a letter of credit is subrogated to the rightsof:
(1) the issuer against the applicant to the same extent as if thenominated person were a secondary obligor of the obligationowed to the issuer by the applicant;
(2) the beneficiary to the same extent as if the nominated personwere a secondary obligor of the underlying obligation owed tothe beneficiary; and
(3) the applicant to the same extent as if the nominated personwere a secondary obligor of the underlying obligation owed tothe applicant.
(d) Notwithstanding any agreement or term to the contrary, therights of subrogation stated in subsections (a) and (b) do not ariseuntil the issuer honors the letter of credit or otherwise pays, and therights in subsection (c) do not arise until the nominated person paysor otherwise gives value. Until then, the issuer, the nominatedperson, and the applicant do not derive under this section present orprospective rights forming the basis of a claim, defense, or excuse.
As added by P.L.183-1996, SEC.4.
IC 26-1-5.1-118
Security interest of issuer or nominated person
Sec. 118. (a) An issuer or nominated person has a security interestin a document presented under a letter of credit to the extent that theissuer or nominated person honors or gives value for thepresentation.
(b) So long as and to the extent that an issuer or nominated person
has not been reimbursed or has not otherwise recovered the valuegiven with respect to a security interest in a document undersubsection (a), the security interest continues and is subject toIC 26-1-9.1, but:
(1) a security agreement is not necessary to make the securityinterest enforceable under IC 26-1-9.1-203(b)(3);
(2) if the document is presented in a medium other than awritten or other tangible medium, the security interest isperfected; and
(3) if the document is presented in a written or other tangiblemedium and is not a certificated security, chattel paper, adocument of title, an instrument, or a letter of credit, thesecurity interest is perfected and has priority over a conflictingsecurity interest in the document so long as the debtor does nothave possession of the document.
As added by P.L.57-2000, SEC.32.