Tennessee Code Annotated
Tenn. Code Ann. § 47-5-114 (2026)
Assignment of proceeds
✓ current as of May 2026
- (a) In this section, "proceeds of a letter of credit" means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include a beneficiary's drawing rights or documents presented by the beneficiary.
- (b) A beneficiary may assign its right to part or all of the proceeds of a letter of credit. The beneficiary may do so before presentation as a present assignment of its right to receive proceeds contingent upon its compliance with the terms and conditions of the letter of credit.
- (c) An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment.
- (d) An issuer or nominated person has no obligation to give or withhold its consent to an assignment of proceeds of a letter of credit, but consent may not be unreasonably withheld if the assignee possesses and exhibits the letter of credit and presentation of the letter of credit is a condition to honor.
- (e) Rights of a transferee beneficiary or nominated person are independent of the beneficiary's assignment of the proceeds of a letter of credit and are superior to the assignee's right to the proceeds.
- (f) Neither the rights recognized by this section between an assignee and an issuer, transferee beneficiary, or nominated person nor the issuer's or nominated person's payment of proceeds to an assignee or a third person affect the rights between the assignee and any person other than the issuer, transferee beneficiary, or nominated person. The mode of creating and perfecting a security interest in or granting an assignment of a beneficiary's rights to proceeds is governed by chapter 9 of this title or other law. Against persons other than the issuer, transferee beneficiary, or nominated person, the rights and obligations arising upon the creation of a security interest or other assignment of a beneficiary's right to proceeds and its perfection are governed by chapter 9 or other law.
Acts 1998, ch. 675, § 1.
Notes of Decisions
Cited in 4
cases, 1975–1994 · leading case: Union Exp. Co. v. N.I.B. Intermarket, A.B., 786 S.W.2d 628 (Tenn. 1990).
Union Exp. Co. v. N.I.B. Intermarket, A.B., 786 S.W.2d 628 (Tenn. 1990). “In the case at bar, both the trial court and the Court of Appeals found that the injunction against payment under the letter of credit was proper under the limited exception to the doctrine of independence found at Tenn.Code Ann. § 47-5-114(2), which provides: (2) Unless…”
CNA Mortg. Investors, Ltd. v. Hamilton Nat'l Bank, 540 S.W.2d 238 (Tenn. Ct. App. 1975). “It is provided in T.C.A. § 47-5-114(1) that: An issuer must honor a draft or demand for payment which complies with the terms of the relevant credit regardless of whether the goods or documents conform to the underlying contract for sale or other contract between the customer…”
McReynolds v. Cherokee Ins. Co., 896 S.W.2d 137 (Tenn. Ct. App. 1994). “The official comments to § 47-5-114 5 state: The letter of credit is essentially a contract between the issuer and the beneficiary and is recognized by this Article [Chapter] as independent of the underlying contract between the customer and the benefi-ciary_ In view of this…”
Banco Cont'l v. First Nat'l Bank, 100 F.R.D. 426 (E.D. Tenn. 1983). “” Tenn.Code Ann. § 47-5-114(1). Thus, the obligation of the issuing bank to honor the letter of credit generally is independent of the underlying contract between the issuing *428 bank’s customer and the beneficiary of the letter of credit.”
— Tenn. Code Ann. § 47-5-114(1) — 3 cases
Union Exp. Co. v. N.I.B. Intermarket, A.B., 786 S.W.2d 628 (Tenn. 1990). “In the case at bar, both the trial court and the Court of Appeals found that the injunction against payment under the letter of credit was proper under the limited exception to the doctrine of independence found at Tenn.Code Ann. § 47-5-114(2), which provides: (2) Unless…”
CNA Mortg. Investors, Ltd. v. Hamilton Nat'l Bank, 540 S.W.2d 238 (Tenn. Ct. App. 1975). “It is provided in T.C.A. § 47-5-114(1) that: An issuer must honor a draft or demand for payment which complies with the terms of the relevant credit regardless of whether the goods or documents conform to the underlying contract for sale or other contract between the customer…”
Banco Cont'l v. First Nat'l Bank, 100 F.R.D. 426 (E.D. Tenn. 1983). “” Tenn.Code Ann. § 47-5-114(1). Thus, the obligation of the issuing bank to honor the letter of credit generally is independent of the underlying contract between the issuing *428 bank’s customer and the beneficiary of the letter of credit.”
— Tenn. Code Ann. § 47-5-114(2) — 2 cases
Union Exp. Co. v. N.I.B. Intermarket, A.B., 786 S.W.2d 628 (Tenn. 1990). “In the case at bar, both the trial court and the Court of Appeals found that the injunction against payment under the letter of credit was proper under the limited exception to the doctrine of independence found at Tenn.Code Ann. § 47-5-114(2), which provides: (2) Unless…”
Banco Cont'l v. First Nat'l Bank, 100 F.R.D. 426 (E.D. Tenn. 1983). “” Tenn.Code Ann. § 47-5-114(1). Thus, the obligation of the issuing bank to honor the letter of credit generally is independent of the underlying contract between the issuing *428 bank’s customer and the beneficiary of the letter of credit.”
— Tenn. Code Ann. § 47-5-114(2)(a) — 1 case
Union Exp. Co. v. N.I.B. Intermarket, A.B., 786 S.W.2d 628 (Tenn. 1990). “In the case at bar, both the trial court and the Court of Appeals found that the injunction against payment under the letter of credit was proper under the limited exception to the doctrine of independence found at Tenn.Code Ann. § 47-5-114(2), which provides: (2) Unless…”
— Tenn. Code Ann. § 47-5-114(2)(b) — 1 case
Union Exp. Co. v. N.I.B. Intermarket, A.B., 786 S.W.2d 628 (Tenn. 1990). “In the case at bar, both the trial court and the Court of Appeals found that the injunction against payment under the letter of credit was proper under the limited exception to the doctrine of independence found at Tenn.Code Ann. § 47-5-114(2), which provides: (2) Unless…”
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.