2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 94 - Rights of Third Parties
Section 9409 - Restrictions on assignment of letter-of-credit rights ineffective

     § 9409.  Restrictions on assignment of letter-of-credit rights
                ineffective.
        (a)  Term or law restricting assignment generally
     ineffective.--A term in a letter of credit or a rule of law,
     statute, regulation, custom or practice applicable to the letter
     of credit which prohibits, restricts or requires the consent of
     an applicant, issuer or nominated person to a beneficiary's
     assignment of or creation of a security interest in a letter-of-
     credit right is ineffective to the extent that the term or rule
     of law, statute, regulation, custom or practice:
            (1)  would impair the creation, attachment or perfection
        of a security interest in the letter-of-credit right; or
            (2)  provides that the assignment or the creation,
        attachment or perfection of the security interest may give
        rise to a default, breach, right of recoupment, claim,
        defense, termination, right of termination or remedy under
        the letter-of-credit right.
        (b)  Limitation on ineffectiveness under subsection (a).--To
     the extent that a term in a letter of credit is ineffective
     under subsection (a) but would be effective under law other than
     this division or a custom or practice applicable to the letter
     of credit, to the transfer of a right to draw or otherwise
     demand performance under the letter of credit or to the
     assignment of a right to proceeds of the letter of credit, the
     creation, attachment or perfection of a security interest in the
     letter-of-credit right:
            (1)  is not enforceable against the applicant, issuer,
        nominated person or transferee beneficiary;
            (2)  imposes no duties or obligations on the applicant,
        issuer, nominated person or transferee beneficiary; and
            (3)  does not require the applicant, issuer, nominated
        person or transferee beneficiary to recognize the security
        interest, pay or render performance to the secured party or
        accept payment or other performance from the secured party.

        Cross References.  Section 9409 is referred to in section
     9401 of this title.