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(810 ILCS 5/4A-507) (from Ch. 26, par. 4A-507)
Sec. 4A-507. Choice of law.
(a) The following rules apply unless the
affected parties otherwise agree or subsection (c) applies:
(1) 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.
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(2) The rights and obligations between the
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| beneficiary's bank and the beneficiary are governed by the law of the jurisdiction in which the beneficiary's bank is located.
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(3) The issue of when payment is made pursuant to a
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| funds transfer by the originator to the beneficiary is governed by the law of the jurisdiction in which the beneficiary's bank is located.
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(b) If the parties described in each paragraph of subsection (a) 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.
(c) 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.
(d) In the event of inconsistency between an agreement under subsection
(b) and a choice of law rule under subsection (c), the agreement under
subsection (b) prevails.
(e) 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.
(Source: P.A. 97-813, eff. 7-13-12.)
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