Effective: July 1, 1998
Latest Legislation: House Bill 338 - 122nd General Assembly
(A) As used 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 any nominated person under the letter of credit. The term does not include a beneficiary's drawing rights or documents presented by the beneficiary.
(B) 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 receive proceeds contingent upon its compliance with the terms and conditions of the letter of credit.
(C) An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment.
(D) An issuer or nominated person has no obligation to give or withhold its consent to an assignment of proceeds of a letter of credit, but consent may not be unreasonably withheld if the assignee possesses and exhibits the letter of credit and presentation of the letter of credit is a condition to honor.
(E) Rights of a transferee beneficiary or nominated person are independent of the beneficiary's assignment of the proceeds of a letter of credit and are superior to the assignee's right to the proceeds.
(F) 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 of proceeds to an assignee or a third person affect the rights between the assignee and any person other than the issuer, transferee beneficiary, or nominated person. The mode of creating and perfecting a security interest in or granting an assignment of a beneficiary's rights to proceeds is governed by Chapter 1309. of the Revised Code or other law. Against persons other than the issuer, transferee beneficiary, or nominated person, the rights and obligations arising upon the creation of a security interest or other assignment of a beneficiary's right to proceeds and its perfection are governed by Chapter 1309. of the Revised Code or other law.
Structure Ohio Revised Code
Title 13 | Commercial Transactions
Chapter 1305 | Letters of Credit
Section 1305.01 | Definitions - Ucc 5-102.
Section 1305.02 | Scope - Ucc 5-103.
Section 1305.03 | Formal Requirements - Ucc 5-104.
Section 1305.04 | Consideration - Ucc 5-105.
Section 1305.05 | Issuance, Amendment, Cancellation, and Duration - Ucc 5-106.
Section 1305.06 | Confirmer, Nominated Person, and Adviser - Ucc 5-107.
Section 1305.07 | Issuer's Rights and Obligations - Ucc 5-108.
Section 1305.08 | Fraud and Forgery - Ucc 5-109.
Section 1305.09 | Warranties - Ucc 5-110.
Section 1305.10 | Remedies - Ucc 5-111.
Section 1305.11 | Transfer of Letter of Credit - Ucc 5-112.
Section 1305.12 | Transfer by Operation of Law - Ucc 5-113.
Section 1305.13 | Assignment of Proceeds - Ucc 5-114.
Section 1305.14 | Statute of Limitations - Ucc 5-115.
Section 1305.15 | Choice of Law and Forum - Ucc 5-116.
Section 1305.16 | Subrogation of Issuer, Applicant, and Nominated Person - Ucc 5-117.
Section 1305.18 | Security Interest of Issuer or Nominated Person - Ucc 5-118.