(1)  The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the manner provided in Section 70A-5-104 or by a provision in the person‘s letter of credit, confirmation, or other undertaking. The jurisdiction whose law is chosen need not bear any relation to the transaction.

Terms Used In Utah Code 70A-5-116

  • Adviser: means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed, or amended. See Utah Code 70A-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 Utah Code 70A-5-102
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Letter of credit: means a definite undertaking that satisfies the requirements of Section 70A-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 Utah Code 70A-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 Utah Code 70A-5-102
  • Person: means :Utah Code 68-3-12.5
  • Record: means information that is inscribed on a tangible medium, or that is stored in an electronic or other medium and is retrievable in perceivable form. See Utah Code 70A-5-102
  • Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
    • (2)  Unless Subsection (1) applies, the liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction in which the person is located. The person is considered to be located at the address indicated in the person’s undertaking. If more than one address is indicated, the person is considered to be located at the address from which the person’s undertaking was issued. For the purpose of jurisdiction, choice of law, and recognition of interbranch letters of credit, but not enforcement of a judgment, all branches of a bank are considered separate juridical entities and a bank is considered to be located at the place where its relevant branch is considered to be located under this Subsection (2).

    (3) 

    (a)  Except as otherwise provided in this Subsection (3)(a), the liability of an issuer, nominated person, or adviser is governed by any rules of custom or practice, such as the Uniform Customs and Practice for Documentary Credits, to which the letter of credit, confirmation, or other undertaking is expressly made subject.

    (b)  If this chapter would govern the liability of an issuer, nominated person, or adviser under Subsection (1) or (2):

    (i)  the relevant undertaking incorporates rules of custom or practice; and

    (ii)  there is conflict between this chapter and those rules as applied to that undertaking, those rules govern except to the extent of any conflict with the nonvariable provisions specified in Subsection 70A-5-103(3).

    (4)  If there is conflict between this chapter and Title 70A, Chapter 3, Uniform Commercial Code – Negotiable Instruments, Chapter 4, Uniform Commercial Code – Bank Deposits and Collections, Chapter 4a, Uniform Commercial Code – Funds Transfers, or Chapter 9a, Uniform Commercial Code – Secured Transactions, this chapter governs.

    (5)  The forum for settling disputes arising out of an undertaking within this chapter may be chosen in the manner and with the binding effect that governing law may be chosen in accordance with Subsection (1).

    Repealed and Re-enacted by Chapter 241, 1997 General Session

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