California Commercial Code

§ 5114

COM § 5114 Effective Jan 1, 1997Div. 5

Statute text

(a)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.

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Legislative history

Added by Stats. 1996, Ch. 176, Sec. 7. Effective January 1, 1997.