New Jersey Statutes 12A:5-118. Security interest of issuer or nominated person
Terms Used In New Jersey Statutes 12A:5-118
- Document: means a draft or other demand, document of title, investment security, certificate, invoice, or other record, statement, or representation of fact, law, right, or opinion (a) which is presented in a written or other medium permitted by the letter of credit or, unless prohibited by the letter of credit, by the standard practice referred to in subsection e. See New Jersey Statutes 12A:5-102
- Issuer: means a bank or other person that issues a letter of credit, but does not include an individual who makes an engagement for personal, family, or household purposes. See New Jersey Statutes 12A:5-102
- Letter of credit: means a definite undertaking that satisfies the requirements of 12A:5-104 by an issuer to a beneficiary at the request or for the account of an applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary presentation by payment or delivery of an item of value. See New Jersey Statutes 12A:5-102
- Nominated person: means a person whom the issuer (a) designates or authorizes to pay, accept, negotiate, or otherwise give value under a letter of credit and (b) undertakes by agreement or custom and practice to reimburse. See New Jersey Statutes 12A:5-102
- person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
- Presentation: means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit. See New Jersey Statutes 12A:5-102
a. An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation.
b. So long as and to the extent that an issuer or nominated person has not been reimbursed or has not otherwise recovered the value given with respect to a security interest in a document under subsection a. of this section, the security interest continues and is subject to Chapter 9, but:
(1) a security agreement is not necessary to make the security interest enforceable under 12A:9-203 b. (3);
(2) if the document is presented in a medium other than a written or other tangible medium, the security interest is perfected; and
(3) if the document is presented in a written or other tangible medium and is not a certificated security, chattel paper, document of title, an instrument, or letter of credit, the security interest is perfected and has priority over a conflicting security interest in the document so long as the debtor does not have possession of the document.
L.2001, c.117, s.15.