355.5-113 Transfer by operation of law.
(1)
(2)
(3)
(4)
(5)
(6)
A successor of a beneficiary may consent to amendments, sign and present
documents, and receive payment or other items of value in the name of the
beneficiary without disclosing its status as a successor.
A successor of a beneficiary may consent to amendments, sign and present
documents, and receive payment or other items of value in its own name as the
disclosed successor of the beneficiary. Except as otherwise provided in subsection
(5) of this section, an issuer shall recognize a disclosed successor of a beneficiary as
beneficiary in full substitution for its predecessor upon compliance with the
requirements for recognition by the issuer of a transfer of drawing rights by
operation of law under the standard practice referred to in KRS 355.5-108(5) or, in
the absence of such a practice, compliance with other reasonable procedures
sufficient to protect the issuer.
An issuer is not obliged to determine whether a purported successor is a successor
of a beneficiary or whether the signature of a purported successor is genuine or
authorized.
Honor of a purported successor's apparently complying presentation under
subsection (1) or (2) of this section has the consequences specified in KRS 355.5108(9) even if the purported successor is not the successor of a beneficiary.
Documents signed in the name of the beneficiary or of a disclosed successor by a
person who is neither the beneficiary nor the successor of the beneficiary are forged
documents for the purposes of KRS 355.5-109.
An issuer whose rights of reimbursement are not covered by subsection (4) of this
section or substantially similar law and any confirmer or nominated person may
decline to recognize a presentation under subsection (2) of this section.
A beneficiary whose name is changed after the issuance of a letter of credit has the
same rights and obligations as a successor of a beneficiary under this section.
Effective: July 1, 2001
History: Repealed and reenacted 2000 Ky. Acts ch. 408, sec. 13, effective July 1, 2001.
-- Created 1958 Ky. Acts ch. 77, sec. 5-113, effective July 1, 1960.
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