§ 6A-4.1-507 - Choice of law.
SECTION 6A-4.1-507
§ 6A-4.1-507 Choice of law. – (a) The following rules apply unless the affected parties otherwise agree orsubsection (c) applies:
(1) The rights and obligations between the sender of apayment order and the receiving bank are governed by the law of thejurisdiction in which the receiving bank is located.
(2) The rights and obligations between the beneficiary's bankand the beneficiary are governed by the law of the jurisdiction in which thebeneficiary's bank is located.
(3) The issue of when payment is made pursuant to a fundstransfer by the originator to the beneficiary is governed by the law of thejurisdiction 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 togovern rights and obligations between each other, the law of that jurisdictiongoverns those rights and obligations, whether or not the payment order or thefunds transfer bears a reasonable relation to that jurisdiction.
(c) A funds transfer system rule may select the law of aparticular jurisdiction to govern (i) rights and obligations betweenparticipating banks with respect to payment orders transmitted or processedthrough the system, or (ii) the rights and obligations of some or all partiesto a funds transfer any part of which is carried out by means of the system. Achoice of law made pursuant to clause (i) is binding on participating banks. Achoice of law made pursuant to clause (ii) is binding on the originator, othersender, or a receiving bank having notice that the funds transfer system mightbe used in the funds transfer and of the choice of law by the system when theoriginator, 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 thefunds transfer is initiated, the beneficiary has notice that the funds transfersystem might be used in the funds transfer and of the choice of law by thesystem. The law of a jurisdiction selected pursuant to this subsection, maygovern, whether or not that law bears a reasonable relation to the matter inuse.
(d) In the event of inconsistency between an agreement undersubsection (b) and a choice of law rule under subsection (c), the agreementunder subsection (b) prevails.
(e) If a funds transfer is made by use of more than one fundstransfer system and there is inconsistency between choice of law rules of thesystems, the matter in issue is governed by the law of the selectedjurisdiction, that has the most significant relationship to the matter in issue.