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Can you summarize VACV 8.5A-117?
Uniform Commercial Code Letters of Credit > Subrogation of issuer, applicant, and nominated person
Short Summary
This legal document, part of the Code of Virginia’s Uniform Commercial Code - Letters of Credit, governs the subrogation rights of issuers, applicants, and nominated persons in relation to letters of credit transactions. According to the document, when an issuer honors a beneficiary’s presentation, the issuer is subrogated to the rights of the beneficiary and the applicant as if the issuer were a secondary obligor of the underlying obligation owed to them. Similarly, when an applicant reimburses an issuer, the applicant is subrogated to the rights of the issuer against any beneficiary, presenter, or nominated person. Additionally, a nominated person who pays or gives value against a draft or demand presented under a letter of credit is subrogated to the rights of the issuer, beneficiary, and applicant. The document clarifies that the rights of subrogation do not arise until the issuer or nominated person pays or otherwise gives value. Until then, the parties involved do not have present or prospective rights forming the basis of a claim, defense, or excuse.
Whom does it apply to?
Issuers, beneficiaries, applicants, presenters, and nominated persons involved in letters of credit transactions
What does it govern?
Subrogation of issuer, applicant, and nominated person
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Virginia