Okla. Stat. tit. 12A § 2-506

Current through Laws 2024, c. 453.

Section 2-506 - Rights of financing agency

(1) A financing agency by paying or purchasing for value a draft which relates to a shipment of goods acquires to the extent of the payment or purchase and in addition to its own rights under the draft and any document of title securing it any rights of the shipper in the goods including the right to stop delivery and the shipper's right to have the draft honored by the buyer.

(2) The right to reimbursement of a financing agency which has in good faith honored or purchased the draft under commitment to or authority from the buyer is not impaired by subsequent discovery of defects with reference to any relevant document which was apparently regular.

Okla. Stat. tit. 12A, § 2-506

Laws 1961, p. 90, § 2-506; Amended by Laws 2005 , HB 2035, c. 140, § 49, eff. 1/1/2006.

Oklahoma Code Comment

(1) This section is more extensive than previous Oklahoma law. A bank who paid a draft accompanied by a negotiable bill of lading acquired title to the bill. State Nat. Bank of Oklahoma City v. Wood, 43 Okl. 251, 142 P. 1002 (1914); Marsh Milling & Grain Co. v. Guaranty State Bank, 69 Okl. 222, 171 P. 1122, L.R.A. 1918D, 704 (1918); City National Bank of Hobart v. State, 73 Okl. 316, 176 P. 232 (1918). There were no suggestions, however, that the bank acquired any greater rights than as a purchaser of the draft or bill of lading.

(2) Previously in Oklahoma, a bank which, on its own initiative, purchased a draft and bill of lading, which it in turn sold to the buyer, was treated as any other vendor, and was held to warrant the genuineness of the bill. American Nat. Bank- of, Lawton v. J. Rosenbaum Grain Co., 148 Okl. 232, 299 P. 447 (1931). This section of the Commercial Code, however, is not dealing with that type of situation. It governs only those transactions in which the bank has honored or purchased the draft at the request of the buyer. In that event, the financing agency does not warrant the genuineness of the bill, and is entitled to reimbursement from the buyer even though the bill is a forgery. However, since Section 2 - 103(1) (b) requires commercial good faith in all transactions, the bank must exercise reasonable care to detect any apparent defects on the face of the document.