TITLE 6A

Uniform Commercial Code

CHAPTER 6A-4.1

Funds Transfers

PART 6A-4.1-501

Miscellaneous Provisions

SECTION 6A-4.1-507



   § 6A-4.1-507  Choice of law. –

(a) The following rules apply unless the affected parties otherwise agree or

subsection (c) applies:



   (1) The rights and obligations between the sender of a

payment order and the receiving bank are governed by the law of the

jurisdiction in which the receiving bank is located.



   (2) The rights and obligations between the beneficiary's bank

and the beneficiary are governed by the law of the jurisdiction in which the

beneficiary's bank is located.



   (3) The issue of when payment is made pursuant to a funds

transfer by the originator to the beneficiary is governed by the law of the

jurisdiction in which the beneficiary's bank is located.



   (b) If the parties described in each paragraph of subsection

(a) have made an agreement selecting the law of a particular jurisdiction to

govern rights and obligations between each other, the law of that jurisdiction

governs those rights and obligations, whether or not the payment order or the

funds transfer bears a reasonable relation to that jurisdiction.



   (c) A funds transfer system rule may select the law of a

particular jurisdiction to govern (i) rights and obligations between

participating banks with respect to payment orders transmitted or processed

through the system, or (ii) the rights and obligations of some or all parties

to a funds transfer any part of which is carried out by means of the system. A

choice of law made pursuant to clause (i) is binding on participating banks. A

choice of law made pursuant to clause (ii) is binding on the originator, other

sender, or a receiving bank having notice that the funds transfer system might

be used in the funds transfer and of the choice of law by the system when the

originator, other sender, or receiving bank issued or accepted a payment order.

The beneficiary of a funds transfer is bound by the choice of law if, when the

funds transfer is initiated, the beneficiary has notice that the funds transfer

system might be used in the funds transfer and of the choice of law by the

system. The law of a jurisdiction selected pursuant to this subsection, may

govern, whether or not that law bears a reasonable relation to the matter in

use.



   (d) In the event of inconsistency between an agreement under

subsection (b) and a choice of law rule under subsection (c), the agreement

under subsection (b) prevails.



   (e) If a funds transfer is made by use of more than one funds

transfer system and there is inconsistency between choice of law rules of the

systems, the matter in issue is governed by the law of the selected

jurisdiction, that has the most significant relationship to the matter in issue.



History of Section.

(P.L. 1991, ch. 189, § 1.)