Effective: July 1, 1998
Latest Legislation: House Bill 338 - 122nd General Assembly
(A) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were the secondary obligor of the underlying obligation owed to the applicant.
(B) An applicant that reimburses an issuer is subrogated to the rights of the issuer against any beneficiary, presenter, or nominated person to the same extent as if the applicant were the secondary obligor of the obligations owed to the issuer and has the rights of subrogation of the issuer to the rights of the beneficiary stated in division (A) of this section.
(C) A nominated person who pays or gives value against a draft or demand presented under a letter of credit is subrogated to the rights of:
(1) The issuer against the applicant to the same extent as if the nominated person were a secondary obligor of the obligation owed to the issuer by the applicant;
(2) The beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary; and
(3) The applicant to the same extent as if the nominated person were the secondary obligor of the underlying obligation owed to the applicant.
(D) Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in divisions (A) and (B) of this section do not arise until the issuer honors the letter of credit or otherwise pays and the rights in division (C) of this section do not arise until the nominated person pays or otherwise gives value. Until then, the issuer, nominated person, and the applicant do not derive under this section present or prospective rights forming the basis of a claim, defense, or excuse.
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.