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Can you summarize VACV 8.5A-114?
Uniform Commercial Code Letters of Credit > Assignment of proceeds
Short Summary
This section of the Code of Virginia, specifically the Uniform Commercial Code Letters of Credit, governs the assignment of proceeds of a letter of credit. It defines the term ‘proceeds of a letter of credit’ as 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 section allows a beneficiary to assign its right to part or all of the proceeds of a letter of credit, contingent upon compliance with the terms and conditions of the letter of credit. However, the assignment of proceeds is not recognized by the issuer or nominated person until their consent is obtained. The rights of a transferee beneficiary or nominated person are independent of the beneficiary’s assignment of the proceeds and superior to the assignee’s right to the proceeds. The section also clarifies that the rights and obligations arising from the creation and perfection of a security interest or assignment of a beneficiary’s rights to proceeds are governed by Title 8.9A or other applicable law. The section does not specify any penalties or exemptions.
Whom does it apply to?
Beneficiaries, issuers, nominated persons, assignees, transferee beneficiaries
What does it govern?
Assignment of proceeds of a letter of credit
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Virginia