7-4A-302
Section 7-4A-302 Obligations of receiving bank in execution of payment order. (a) Except as
provided in subsections (b) through (d), if the receiving bank accepts a payment order pursuant
to Section 7-4A-209(a), the bank has the following obligations in executing the order: (1)
The receiving bank is obliged to issue, on the execution date, a payment order complying with
the sender's order and to follow the sender's instructions concerning (i) any intermediary
bank or funds-transfer system to be used in carrying out the funds transfer, or (ii) the means
by which payment orders are to be transmitted in the funds transfer. If the originator's bank
issues a payment order to an intermediary bank, the originator's bank is obliged to instruct
the intermediary bank according to the instruction of the originator. An intermediary bank
in the funds transfer is similarly bound by an instruction given to it by the sender of the
payment order it accepts. (2) If the sender's instruction states that...
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7-4A-103
Section 7-4A-103 Payment order - Definitions. (a) In this article: (1) "Payment order"
means an instruction of a sender to a receiving bank, transmitted orally, electronically,
or in writing, to pay, or to cause another bank to pay, a fixed or determinable amount of
money to a beneficiary if: (i) the instruction does not state a condition to payment to the
beneficiary other than time of payment, (ii) the receiving bank is to be reimbursed by debiting
an account of, or otherwise receiving payment from, the sender, and (iii) the instruction
is transmitted by the sender directly to the receiving bank or to an agent, funds-transfer
system, or communication system for transmittal to the receiving bank. (2) "Beneficiary"
means the person to be paid by the beneficiary's bank. (3) "Beneficiary's bank"
means the bank identified in a payment order in which an account of the beneficiary is to
be credited pursuant to the order or which otherwise is to make payment to the beneficiary
if the order...
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7-4A-402
Section 7-4A-402 Obligation of sender to pay receiving bank. (a) This section is subject to
Sections 7-4A-205 and 7-4A-207. (b) With respect to a payment order issued to the beneficiary's
bank, acceptance of the order by the bank obliges the sender to pay the bank the amount of
the order, but payment is not due until the payment date of the order. (c) This subsection
is subject to subsection (e) and to Section 7-4A-303. With respect to a payment order issued
to a receiving bank other than the beneficiary's bank, acceptance of the order by the receiving
bank obliges the sender to pay the bank the amount of the sender's order. Payment by the sender
is not due until the execution date of the sender's order. The obligation of that sender to
pay its payment order is excused if the funds transfer is not completed by acceptance by the
beneficiary's bank of a payment order instructing payment to the beneficiary of that sender's
payment order. (d) If the sender of payment order pays the order...
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7-4A-104
Section 7-4A-104 Funds transfer - Definitions. In this article: (a) "Funds transfer"
means the series of transactions, beginning with the originator's payment order, made for
the purpose of making payment to the beneficiary of the order. The term includes any payment
order issued by the originator's bank or an intermediary bank intended to carry out the originator's
payment order. A funds transfer is completed by acceptance by the beneficiary's bank of a
payment order for the benefit of the beneficiary of the originator's payment order. (b) "Intermediary
bank" means a receiving bank other than the originator's bank or the beneficiary's bank.
(c) "Originator" means the sender of the first payment order in a funds transfer.
(d) "Originator's bank" means (i) the receiving bank to which the payment order
of the originator is issued if the originator is not a bank, or (ii) the originator if the
originator is a bank. (Acts 1992, 2nd Ex. Sess., No. 92-701, p. 145, §1.)...
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7-4A-105
Section 7-4A-105 Other definitions. (a) In this article: (1) "Authorized account"
means a deposit account of a customer in a bank designated by the customer as a source of
payment of payment orders issued by the customer to the bank. If a customer does not so designate
an account, any account of the customer is an authorized account if payment of a payment order
from that account is not inconsistent with a restriction on the use of that account. (2) "Bank"
means a person engaged in the business of banking and includes a savings bank, savings and
loan association, credit union, and trust company. A branch or separate office of a bank is
a separate bank for purposes of this article. (3) "Customer" means a person, including
a bank, having an account with a bank, or from whom a bank has agreed to receive payment orders.
(4) "Funds-transfer business day" of a receiving bank means the part of a day during
which the receiving bank is open for the receipt, processing, and transmittal of...
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7-4A-303
Section 7-4A-303 Erroneous execution of payment order. (a) A receiving bank that (i) executes
the payment order of the sender by issuing a payment order in an amount greater than the amount
of the sender's order, or (ii) issues a payment order in execution of the sender's order and
then issues a duplicate order, is entitled to payment of the amount of the sender's order
under Section 7-4A-402(c) if that subsection is otherwise satisfied. The bank is entitled
to recover from the beneficiary of the erroneous order the excess payment received to the
extent allowed by the law governing mistake and restitution. (b) A receiving bank that executes
the payment order of the sender by issuing a payment order in an amount less than the amount
of the sender's order is entitled to payment of the amount of the sender's order under Section
7-4A-402(c) if (i) that subsection is otherwise satisfied and (ii) the bank corrects its mistake
by issuing an additional payment order for the benefit of the...
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7-4A-305
Section 7-4A-305 Liability for late or improper execution or failure to execute payment order.
(a) If a funds transfer is completed but execution of a payment order by the receiving bank
in breach of Section 7-4A-302 results in delay in payment to the beneficiary, the bank is
obliged to pay interest to either the originator or the beneficiary of the funds transfer
for the period of delay caused by the improper execution. Except as provided in subsection
(c), additional damages are not recoverable. (b) If execution of a payment order by a receiving
bank in breach of Section 7-4A-302 results in (i) noncompletion of the funds transfer, (ii)
failure to use an intermediary bank designated by the originator, or (iii) issuance of a payment
order that does not comply with the terms of the payment order of the originator, the bank
is liable to the originator for its expenses in the funds transfer and for incidental expenses
and interest losses, to the extent not covered by subsection (a),...
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7-4A-507
Section 7-4A-507 Choice of law. (a) The following rules apply unless the affected parties otherwise
agree or subsection (c) applies: (1) The rights and obligations between the sender of a payment
order and the receiving bank are governed by the law of the jurisdiction in which the receiving
bank is located. (2) The rights and obligations between the beneficiary's bank and the beneficiary
are governed by the law of the jurisdiction in which the beneficiary's bank is located. (3)
The issue of when payment is made pursuant to a funds transfer by the originator to the beneficiary
is governed by the law of the jurisdiction in which the beneficiary's bank is located. (b)
If the parties described in each paragraph of subsection (a) have made an agreement selecting
the law of a particular jurisdiction to govern rights and obligations between each other,
the law of that jurisdiction governs those rights and obligations, whether or not the payment
order or the funds transfer bears a reasonable...
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7-4A-502
Section 7-4A-502 Creditor process served on receiving bank; setoff by beneficiary's bank. (a)
As used in this section, "creditor process" means levy, attachment, garnishment,
notice of lien, sequestration, or similar process issued by, or on behalf of a creditor or
other claimant with respect to an account. (b) This subsection applies to creditor process
with respect to an authorized account of the sender of a payment order if the creditor process
is served on the receiving bank. For the purpose of determining rights with respect to the
creditor process, if the receiving bank accepts the payment order the balance in the authorized
account is deemed to be reduced by the amount of the payment order to the extent the bank
did not otherwise receive payment of the order, unless the creditor process is served at a
time and in a manner affording the bank a reasonable opportunity to act on it before the bank
accepts the payment order. (c) If a beneficiary's bank has received a payment order...
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7-4A-403
Section 7-4A-403 Payment by sender to receiving bank. (a) Payment of the sender's obligation
under Section 7-4A-402 to pay the receiving bank occurs as follows: (1) If the sender is a
bank, payment occurs when the receiving bank receives final settlement of the obligation through
a Federal Reserve Bank or through a funds-transfer system. (2) If the sender is a bank and
the sender (i) credited an account of the receiving bank with the sender, or (ii) caused an
account of the receiving bank in another bank to be credited, payment occurs when the credit
is withdrawn, or if not withdrawn, at midnight of the day on which the credit is withdrawable
and the receiving bank learns of that fact. (3) If the receiving bank debits an account of
the sender with the receiving bank, payment occurs when the debit is made to the extent the
debit is covered by a withdrawable credit balance in the account. (b) If the sender and receiving
bank are members of a funds-transfer system that nets obligations...
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