(a) Except as otherwise provided in section 42a-5-113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred.
(b) Even if a letter of credit provides that it is transferable, the issuer may refuse to recognize or carry out a transfer if: (1) The transfer would violate applicable law; or (2) the transferor or transferee has failed to comply with any requirement stated in the letter of credit or any other requirement relating to transfer imposed by the issuer which is within the standard practice referred to in subsection (e) of section 42a-5-108 or is otherwise reasonable under the circumstances.
(1959, P.A. 133, S. 5-112; P.A. 96-198, S. 12.)
History: P.A. 96-198 entirely replaced former provisions re the time allowed for honor or rejection, the withholding of honor or rejection by consent and the definition of “presenter” with provisions re the transfer of a letter of credit, in part a restatement of Sec. 42a-5-116(1), revised to 1995.
See Secs. 42a-5-102(a)(12) and 42a-5-108(b), (c) and (h) for successor provisions to Sec. 42a-5-112, revised to 1995, re time allowed for honor or rejection, withholding honor or rejection by consent and the definition of “presenter”.
Cited. 173 C. 492.
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