{"data":{"id":"us-ky/krs-355.9-409","jurisdiction":"us-ky","citation":"KRS 355.9-409","heading":"Restrictions on assignment of letter-of-credit rights ineffective.","body":"(1) A term in a letter of credit or a rule of law, statute, regulation, custom, or practice\napplicable to the letter of credit which prohibits, restricts, or requires the consent of\nan applicant, issuer, or nominated person to a beneficiary's assignment of or\ncreation of a security interest in a letter -of-credit right is ineffective to the extent\nthat the term or rule of law, statute, regulation, custom, or practice:\n(a) Would impair the creation, attachment, or perfection of a security interest in\nthe letter-of-credit right; or\n(b) Provides that the assignment or the creation, attachment, or perfection of the\nsecurity interest may give rise to a default, breach, right of recoupment, claim,\ndefense, termination, right of termination, or remedy under the letter -of-credit\nright.\n(2) To the extent that a term in a letter of credit is ineffective under subsection (1) of\nthis section but would be effective under law other than this article or a custom or\npractice applicable to the letter of credit, to the transfer of a right to draw or\notherwise demand performance under the letter of credit, or to the assignment of a\nright to proceeds of the letter of credit, the creation, attachment, or perfection of a\nsecurity interest in the letter-of-credit right:\n(a) Is not enforc eable against the applicant, issuer, nominated person, or\ntransferee beneficiary;\n(b) Imposes no duties or obligations on the applicant, issuer, nominated person, or\ntransferee beneficiary; and\n(c) Does not require the applicant, issuer, nominated person, or transferee\nbeneficiary to recognize the security interest, pay or render performance to the\nsecured party, or accept payment or other performance from the secured party.\n(3) Subsection (1) of this section does not apply to the following statutes and to\nadministrative regulations promulgated under the authority of those statutes: KRS\n304.2-260, KRS 304.24 -420, Subtitle 33 of KRS Chapter 304, and Subtitle 37 of\nKRS Chapter 304.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33805","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:48Z","sha256":"84fa2d58d02800ae9eebab9d980c95c8ce36c960f8e2bca4d801fd814576ff42","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.9-408","next":"us-ky/krs-355.9-501"},"notice":"GroundRules: Original legal text. Not legal advice."}