Tennessee Code Annotated
Tenn. Code Ann. § 47-5-113 (2026)
Transfer by operation of law
✓ current as of May 2026
- (a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name of the beneficiary without disclosing its status as a successor.
- (b) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in its own name as the disclosed successor of the beneficiary. Except as otherwise provided in subsection (e), an issuer shall recognize a disclosed successor of a beneficiary as beneficiary in full substitution for its predecessor upon compliance with the requirements for recognition by the issuer of a transfer of drawing rights by operation of law under the standard practice referred to in § 47-5-108(e) or, in the absence of such a practice, compliance with other reasonable procedures sufficient to protect the issuer.
- (c) An issuer is not obliged to determine whether a purported successor is a successor of a beneficiary or whether the signature of a purported successor is genuine or authorized.
- (d) Honor of a purported successor's apparently complying presentation under subsection (a) or (b) has the consequences specified in § 47-5-108(i) even if the purported successor is not the successor of a beneficiary. Documents signed in the name of the beneficiary or of a disclosed successor by a person who is neither the beneficiary nor the successor of the beneficiary are forged documents for the purposes of § 47-5-109.
- (e) An issuer whose rights of reimbursement are not covered by subsection (d) or substantially similar law and any confirmer or nominated person may decline to recognize a presentation under subsection (b).
- (f) A beneficiary whose name is changed after the issuance of a letter of credit has the same rights and obligations as a successor of a beneficiary under this section.
Acts 1998, ch. 675, § 1.
Notes of Decisions
Cited in 1
case, 1972–1972 · leading case: Talbot v. Bank of Hendersonville, 495 S.W.2d 548 (Tenn. Ct. App. 1972).
Talbot v. Bank of Hendersonville, 495 S.W.2d 548 (Tenn. Ct. App. 1972). “Plaintiffs cite T.C.A. § 47-5-113 to the effect that the bank seeking to collect a draft may give an indemnity to induce payment in case of defects in documents; however, nothing in this statute requires a bank honoring its own letter of credit to demand indemnity before payment.”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.