Wis. Stat. » CHAPTER 405 — UNIFORM COMMERCIAL CODE — LETTERS OF CREDIT
Wisconsin Statutes

Wis. Stat. § 405.114 (2026)

Assignment of proceeds

✓ current as of July 2026
Find cases: SyfertCases citing this section WI-LEGdocs.legis.wisconsin.gov JustiaChapter on Justia CornellLII Search CasesGoogle Scholar
405.114405.114 Assignment of proceeds.
405.114(1)(1) 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.
405.114(2)(2) 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.
405.114(3)(3) An issuer or nominated person need not recognize an assignment of proceeds of a letter of credit until it consents to the assignment.
405.114(4)(4) 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.
405.114(5)(5) 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.
405.114(6)(6) 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 affects 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 ch. 409 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 ch. 409 or other law.
Down
Up
405.114 HistoryHistory: 2005 a. 213.
Notes of Decisions
Cited in 8 cases, 1977–2006 · leading case: Fed. Deposit Ins. Corp. v. Freudenfeld, 492 F. Supp. 763 (E.D. Wis. 1980).
Sort: Relevance Newest Treatment
Fed. Deposit Ins. Corp. v. Freudenfeld, 492 F. Supp. 763 (E.D. Wis. 1980). · cites it 10× “Wis.Stat. § 405.114(1). The FDIC was therefore legally bound to pay notwithstanding any breaches of duties involving the underlying letter of credit.”
Datapoint Corp. v. M & I Bank of Hilldale, 665 F. Supp. 722 (W.D. Wis. 1987). · cites it 6× “The Supreme Court for the State of Wisconsin has held under Wis.Stat. § 405.114 that an issuing bank has a duty to determine whether documents presented by the beneficiary of a credit appear on their face to be in accordance with the terms of the credit, and that having…”
Werner v. A. L. Grootemaat & Sons, Inc., 259 N.W.2d 310 (Wis. 1977). · cites it 3× “The engagement may be either an agreement to honor or a statement that the bank or other person is authorized to honor.”
Beach v. First Union Nat'l Bank of North Carolina (In Re Carley Capital Grp.), 118 B.R. 982 (Bankr. W.D. Wis. 1990). · cites it 8× “This conclusion is reinforced by Wis.Stat. § 405.114 Official UCC Comment 1, which states that “The letter of credit is essentially a contract between the issuer and the beneficiary and is recognized by this Article as independent of the underlying contract between the customer…”
J.P. Morgan Trust Co. v. U.S. Bank, N.A., 446 F. Supp. 2d 956 (E.D. Wis. 2006). · cites it 6× “Morgan contends that neither the Bank nor Easton pleaded or argued that it committed fraud, that it did not have an opportunity to brief the fraud issue and that by addressing the issue, I ventured outside the adversarial issues presented by the parties.”
Whinnery v. Bank of Onalaska (In Re Taggatz), 106 B.R. 983 (Bankr. W.D. Wis. 1989). “While a beneficiary may demand payment for any reason, the beneficiary’s draft or demand for payment must comply with the terms of the letter of credit before the issuer’s duty to pay arises under WIS.”
J.P. Morgan Trust Co., N.A. v. U.S. Bank, N.A., 381 F. Supp. 2d 865 (E.D. Wis. 2005). · cites it 8× “See Wis. Stat. § 405.114 (2). With these principles in mind, I turn to the parties’ claims.”
JP Morgan Trust Co., NA v. US BANK, NA, 381 F. Supp. 2d 865 (E.D. Wis. 2005). · cites it 8× “See Wis. Stat. § 405.114 (2). With these principles in mind, I turn to the parties' claims.”
— Wis. Stat. § 405.114(1) — 3 cases
Fed. Deposit Ins. Corp. v. Freudenfeld, 492 F. Supp. 763 (E.D. Wis. 1980). “Wis.Stat. § 405.114(1). The FDIC was therefore legally bound to pay notwithstanding any breaches of duties involving the underlying letter of credit.”
Datapoint Corp. v. M & I Bank of Hilldale, 665 F. Supp. 722 (W.D. Wis. 1987). “The Supreme Court for the State of Wisconsin has held under Wis.Stat. § 405.114 that an issuing bank has a duty to determine whether documents presented by the beneficiary of a credit appear on their face to be in accordance with the terms of the credit, and that having…”
Werner v. A. L. Grootemaat & Sons, Inc., 259 N.W.2d 310 (Wis. 1977). “The engagement may be either an agreement to honor or a statement that the bank or other person is authorized to honor.”
— Wis. Stat. § 405.114(2) — 1 case
Werner v. A. L. Grootemaat & Sons, Inc., 259 N.W.2d 310 (Wis. 1977). “The engagement may be either an agreement to honor or a statement that the bank or other person is authorized to honor.”
— Wis. Stat. § 405.114(3) — 3 cases
Fed. Deposit Ins. Corp. v. Freudenfeld, 492 F. Supp. 763 (E.D. Wis. 1980). “Wis.Stat. § 405.114(1). The FDIC was therefore legally bound to pay notwithstanding any breaches of duties involving the underlying letter of credit.”
Werner v. A. L. Grootemaat & Sons, Inc., 259 N.W.2d 310 (Wis. 1977). “The engagement may be either an agreement to honor or a statement that the bank or other person is authorized to honor.”
Beach v. First Union Nat'l Bank of North Carolina (In Re Carley Capital Grp.), 118 B.R. 982 (Bankr. W.D. Wis. 1990). “This conclusion is reinforced by Wis.Stat. § 405.114 Official UCC Comment 1, which states that “The letter of credit is essentially a contract between the issuer and the beneficiary and is recognized by this Article as independent of the underlying contract between the customer…”
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.