Section 45.14.507. Choice of law.

   (a) The following rules apply unless the affected parties otherwise agree or (c) - (d) of this section 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;
        (2) 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;
        (3) the issue of when payment is made under 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.
   (b) If the parties described in each paragraph of (a) of this section 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
        (1) rights and obligations between participating banks with respect to payment orders transmitted or processed through the system; or
        (2) the rights and obligations of some or all parties to a funds transfer if a part of the funds transfer is carried out by means of the system.
   (d) A choice of law made under (c)(1) of this section is binding on participating banks. A choice of law made under (c)(2) of this section 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 under this subsection or (c) of this section may govern, whether or not that law bears a reasonable relation to the matter in issue.
   (e) In the event of inconsistency between an agreement under (b) of this section and a choice-of-law rule under (c) - (d) of this section, the agreement under (b) of this section prevails.
   (f) 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.

Authorities

45.01.301

Notes

References

AS 45.01.301 Territorial applicability; parties' power to choose applicable law.

History

(Sec. 12 ch 34 SLA 1993)