Printable Format84-5-116. Choice of law and forum. (a) The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the manner provided in K.S.A. 84-5-104 or by a provision in the person's letter of credit, confirmation, or other undertaking. The jurisdiction whose law is chosen need not bear any relation to the transaction.
(b) Unless subsection (a) applies, the liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction in which the person is located. The person is considered to be located at the address indicated in the person's undertaking. If more than one address is indicated, the person is considered to be located at the address from which the person's undertaking was issued. For the purpose of jurisdiction, choice of law, and recognition of interbranch letters of credit, but not enforcement of a judgment, all branches of a bank are considered separate juridical entities and a bank is considered to be located at the place where its relevant branch is considered to be located under this subsection.
(c) Except as otherwise provided in this subsection, the liability of an issuer, nominated person, or adviser is governed by any rules of custom or practice, such as the uniform customs and practice for documentary credits, to which the letter of credit, confirmation or other undertaking is expressly made subject. If (i) this article would govern the liability of an issuer, nominated person, or adviser under subsection (a) or (b), (ii) the relevant undertaking incorporates rules of custom or practice, and (iii) there is conflict between this article and those rules as applied to that undertaking, those rules govern except to the extent of any conflict with the nonvariable provisions specified in K.S.A. 84-5-103(c).
(d) If there is conflict between this article and article 3, 4, 4A, or 9, this article governs.
(e) The forum for settling disputes arising out of an undertaking within this article may be chosen in the manner and with the binding effect that governing law may be chosen in accordance with subsection (a).
History: L. 1996, ch. 202, § 16; July 1.
KANSAS COMMENT, 1996
This section is new and is identical to the 1995 Official Text. Subsection (d), referring to Article 4A, is using the reference in the 1995 Official Text which would be used by many jurisdictions. For transactions entirely in Kansas, the reference would be to Article 4a.
Subsection (a) allows the parties to choose the jurisdiction whose law governs, regardless of whether that jurisdiction has any other connection with the transaction. The choice of law provision must meet the formalities required by 84-5-104 or be provided in the person's undertaking. In addition, subsection (e) permits the parties to use the provisions of subsection (a) to chose the forum to settle the dispute if the same formalities are met, but Official Comment 5 indicates this will only be valid if the forum chosen is able to hear the dispute.
Subsection (b) applies the law of the location of the issuer, nominated person or advisor in determining their liability, if the parties have not made a choice of law. That location is generally the location where the undertaking originated, so that a single entity can have different locations for different transactions. Subsection (c) adopts the rules of custom or practice and provides that in case of a conflict between those rules and Article 5, the rules of custom and practice supersede the rules of Article 5 if they have been incorporated in the undertaking, with one exception. That exception is the nonvariable rules specified in 85-5-103(c), which enumerates the provisions which can not be varied by agreement in the undertaking. In addition, Article 5 governs in case of a conflict with Article 3, 4, 4a or 9.
Revisor's Note:
Former section 84-5-116 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.
Law Review and Bar Journal References:
"Conflict of Laws in Kansas: A Guide to Navigating the Dismal Swamp," Terri Savely Bezek, 71 J.K.B.A. No. 8, 21 (2002).