N.Y. Uniform Commercial Code Law § 4-a-507: Choice of Law

Section 4-A-507. Choice of Law.

(1) The following rules apply unless the affected parties otherwise

agree or subsection (3) applies:

(a) 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.

(b) 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.

(c) 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.

(2) If the parties described in each paragraph of subsection (1) 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.

(3) 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 issue.

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

subsection (2) and a choice-of-law rule under subsection (3), the

agreement under subsection (2) prevails.

(5) 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.