State Codes and Statutes

Statutes > Utah > Title-70a > Chapter-05 > 70a-5-114

70A-5-114. Assignment of proceeds.
(1) In this section, "proceeds of a letter of credit" means the cash, check, accepted draft,or other item of value paid or delivered upon honor or giving of value by the issuer or anynominated person under the letter of credit. The term does not include a beneficiary's drawingrights or documents presented by the beneficiary.
(2) A beneficiary may assign its right to part or all of the proceeds of a letter of credit. The beneficiary may do so before presentation as a present assignment of its right to receiveproceeds contingent upon its compliance with the terms and conditions of the letter of credit.
(3) An issuer or nominated person need not recognize an assignment of proceeds of aletter of credit until it consents to the assignment.
(4) An issuer or nominated person has no obligation to give or withhold its consent to anassignment of proceeds of a letter of credit, but consent may not be unreasonably withheld if theassignee possesses and exhibits the letter of credit and presentation of the letter of credit is acondition to honor.
(5) Rights of a transferee beneficiary or nominated person are independent of thebeneficiary's assignment of the proceeds of a letter of credit and are superior to the assignee'sright to the proceeds.
(6) Neither the rights recognized by this section between an assignee and an issuer,transferee beneficiary, or nominated person nor the issuer's or nominated person's payment ofproceeds to an assignee or a third person affect the rights between the assignee and any personother than the issuer, transferee beneficiary, or nominated person. The mode of creating andperfecting a security interest in or granting an assignment of a beneficiary's rights to proceeds isgoverned by Title 70A, Chapter 9a, Uniform Commercial Code -- Secured Transactions, or otherlaw. Against persons other than the issuer, transferee beneficiary, or nominated person, the rightsand obligations arising upon the creation of a security interest or other assignment of abeneficiary's right to proceeds and its perfection are governed by Title 70A, Chapter 9a, UniformCommercial Code -- Secured Transactions, or other law.

Amended by Chapter 252, 2000 General Session