whicharenotyetfinal. Somemeasures beingconsidered tofacethisproblem arediscussed inparagraphs 97to99 andintheAnnextothischapter. D.Consequences associated withfinality 1.General rulesgivingpriority tofundstransfer 49.Several general rulesgivethetransferee rightstothecreditarising outofthefundstransfer priortothetransfer becoming final. Themost inclusive ofthosegeneral rulesistheFrenchrulethattheissuance ofa chequetransfers theprovision totheholderofacheque(i.e.the transferee). As aconsequence ofthisrulethetransferee normally prevails overathirdpartyclaimant whoseclaimagainst thetransferor's account arose afterissueofthecheque. However, eventhoughthetransferee prevails over thirdpartyclaimants, thefundstransfer itselfisnotfinaluntilthecheque hasbeenhonoured. 50.Ageneral ruleofmorelimited application isthatthetransferor bankor anintermediary bankmustbeallowed tocomplete thefundstransferifithas irrevocably committed itselftohonourthetransferor's instruction. Thismay occur,forexample, bythebankaccepting abillofexchange (orcertifying a chequeifpermitted bytherelevant law).Itmayalsooccurwhen atransferor banksettles forafundstransfer byissuingitsownirrevocable promise to pay,suchasabanker's chequeorbanker's payment. Thepolicythatlies behindthisruleisthatthebankwhichiscommitted tohonourthefunds transfer instruction ortosettleforitshouldbeabletoreimburse itself fromthetransferor's account inspiteoftheintervening creation ofthird partyrightsintheaccount. Thispolicywouldalsoseemtobeapplicable to fundstransfers madethrough aclearing-·house ifthesending bankguarantees settlement tothereceiving bankandtoguarantee ofhonourplansfordebit transfer instructions, asdiscussed inparagraphs 41to43.•• •A/CN.9/266/Add.l English Page15 2.Specific conflicts inpriority (a)Effect onfundstransfer oflegalrightsofthirdpersons 51.Thelegalrulesgoverning theeffectonthetransferor's account ofhis death,thecommencement ofinsolvency proceedings against himorattachment of theaccount arelargely orcompletely foundoutside thelawgoverning funds transfers. Theselegalrulescreaterightsinthirdpersons whichmaycompete withtherightsclaimed bythetransferee. As aresult,itisoftendifficult loreconcile thelawgoverning thethirdpartyrightandthelawgoverning the fundstransfer its~lf. 52.Theconflict inpriority between thethirdpartyrightandrightsarising outofthefundstransfer canariseinseveral ways.Themostdirectsource ofconflict isbetween thethirdpartyclaimant andth~transferee whoclaims thatthefundstransfer wasfinalbeforethethirdpartyrightarose.Ifthe transferee hasalready usedthecredit, theclaimofthetransferee may be asserted bythetransferee bank.Inmanycases,theimmediate conflict is between thethirdpartyclaimant andthetransferor bank,whichclaimsthat thethirdparty's rightsinthetransferor's account aroseafterthecredit hadalready beentransferred fromthataccount. Thisisofparticular importance toatransferor bankwhichhaslittlelike'lihood ofrecovering the creditfromthetransferee. (i)Deathofthetransferor 53.Insomelegalsystems thedeathofthetransferor mayterminate all authority toactonhisbehalforunderhisinstructions atthemomentthe deathoccurs. Although thisruleisoftenexplained as anautomatic termination oftheagencyrelationship hetween thetransferor andthebankor banksimplementing thefundstransfer, itwouldalsoseemtobeapplicable in thoselegalsystems wherethebankorbankscarrying outthefundstransfer on thetransferor's instructions arenotconsidered tobehisagent. However, in manylegalsystems thebank'sauthority isterminated onlybynoticetoitof thedeath. Furthermore, sincethetransferor issolvent atthelimeofdeath inthevastmajority ofcasesandthefundstransfer isusually forthe purpose ofdischarging anobligation whichwouldneedtobedischarged even afterhisdeath, somelegalsystems permitthetransferor banktocontinue to honourthetransferor's fundstransfer instructions foraperiodoftimeeven afternoticeofhisdeathunlessordered tostopdoingso by an heiror,in someothercountries, anypersonclaiming aninterest intheaccount. (ii)Commencement ofinsolvency proceedings against transferor 54.The commencement ofinsolvency proceedings against thetransferor creates a morecomplex legalsituation thandoeshisdeathbecause ofthewidevariety ofrulesgoverning insolvency indifferent countries. Thiscauses particularly difficult legalproblems foratransferee whoisresident in3 country foreign totheplacewheretheinsolvency proceedings against the transferor aretakingplace. However, oneelement incommonwiththelegal situation causedbythedeathofthetransferor isthatthecommencement of
**Analysis**
The text appears to be discussing the legal aspects of financial transactions, specifically the consequences of a fund transfer not being final, and the conflicts that can arise between the transferee, third-party claimants, and the transferor bank. The language used is technical and legal, suggesting that the text is part of a legal document or a scholarly work. The topics discussed, such as the French rule on cheque issuance, bank guarantees, and the effect of death or insolvency on a transferor's account, are all related to the field of finance and law.

**Category**
Finance, Law