Utah Code 70A-5-117. Subrogation of issuer, applicant, and nominated person
Current as of: 2023 | Check for updates
|
Other versions
(1) | An issuer that honors a beneficiary‘s presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were the secondary obligor of the underlying obligation owed to the applicant. |
(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 |
(2) | An applicant that reimburses an issuer is subrogated to the rights of the issuer against any beneficiary, presenter, or nominated person to the same extent as if the applicant were the secondary obligor of the obligations owed to the issuer and has the rights of subrogation of the issuer to the rights of the beneficiary stated in Subsection (1). |
(4) | Notwithstanding any agreement or term to the contrary, the rights of subrogation stated in Subsections (1) and (2) do not arise until the issuer honors the letter of credit or otherwise pays and the rights in Subsection (3) do not arise until the nominated person pays or otherwise gives value. Until then, the issuer, nominated person, and the applicant do not derive under this section present or prospective rights forming the basis of a claim, defense, or excuse. |
Repealed and Re-enacted by Chapter 241, 1997 General Session