(1). 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.

[PL 1997, c. 429, Pt. A, §2 (NEW); PL 1997, c. 429, Pt. A, §4 (AFF).]

Terms Used In Maine Revised Statutes Title 11 Sec. 5-1114

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Beneficiary: means a person who under the terms of a letter of credit is entitled to have its complying presentation honored. See Maine Revised Statutes Title 11 Sec. 5-1102
  • 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 Maine Revised Statutes Title 11 Sec. 5-1102
  • Letter of credit: means a definite undertaking that satisfies the requirements of section 5?1104 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 Maine Revised Statutes Title 11 Sec. 5-1102
  • Nominated person: means a person whom the issuer:
    (i) Designates or authorizes to pay, accept, negotiate or otherwise give value under a letter of credit; and
    (ii) Undertakes by agreement or custom and practice to reimburse. See Maine Revised Statutes Title 11 Sec. 5-1102
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Presentation: means delivery of a document to an issuer or nominated person for honor or giving of value under a letter of credit. See Maine Revised Statutes Title 11 Sec. 5-1102
(2). 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.

[PL 1997, c. 429, Pt. A, §2 (NEW); PL 1997, c. 429, Pt. A, §4 (AFF).]

(3). An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment.

[PL 1997, c. 429, Pt. A, §2 (NEW); PL 1997, c. 429, Pt. A, §4 (AFF).]

(4). An issuer or nominated person has no obligation to give or withhold its consent to an assignment of proceeds of a letter of credit, but consent may not be unreasonably withheld if the assignee possesses and exhibits the letter of credit and presentation of the letter of credit is a condition to honor.

[PL 1997, c. 429, Pt. A, §2 (NEW); PL 1997, c. 429, Pt. A, §4 (AFF).]

(5). Rights of a transferee beneficiary or nominated person are independent of the beneficiary’s assignment of the proceeds of a letter of credit and are superior to the assignee’s right to the proceeds.

[PL 1997, c. 429, Pt. A, §2 (NEW); PL 1997, c. 429, Pt. A, §4 (AFF).]

(6). Neither the rights recognized by this section between an assignee and an issuer, transferee beneficiary or nominated person nor the issuer’s or nominated person’s payment of proceeds to an assignee or a 3rd person affect the rights between the assignee and any person other than the issuer, transferee beneficiary or nominated person. The mode of creating and perfecting a security interest in or granting an assignment of a beneficiary’s rights to proceeds is governed by Article 9 or other law. Against persons other than the issuer, transferee beneficiary or nominated person, the rights and obligations arising upon the creation of a security interest or other assignment of a beneficiary’s right to proceeds and its perfection are governed by Article 9 or other law.

[PL 1997, c. 429, Pt. A, §2 (NEW); PL 1997, c. 429, Pt. A, §4 (AFF).]

SECTION HISTORY

PL 1997, c. 429, §A2 (NEW). PL 1997, c. 429, §A4 (AFF).