§4A-404. Obligation of beneficiary's bank to pay and give notice to beneficiary

Link to law: http://legislature.vermont.gov/statutes/section/09A/004A/00404
Published: 2015

Print

The Vermont Statutes Online



Title

09A

:
Uniform Commercial Code






Chapter

004A

:
Funds Transfers











 

§

4A-404. Obligation of beneficiary's bank to pay and give notice to beneficiary

(a) Subject to

sections 4A-211(e), 4A-405(d), and 4A-405(e), if a beneficiary's bank accepts a

payment order, the bank is obliged to pay the amount of the order to the beneficiary

of the order. Payment is due on the payment date of the order, but if

acceptance occurs on the payment date after the close of the funds-transfer

business day of the bank, payment is due on the next funds-transfer business

day. If the bank refuses to pay after demand by the beneficiary and receipt of

notice of particular circumstances that will give rise to consequential damages

as a result of nonpayment, the beneficiary may recover damages resulting from

the refusal to pay to the extent the bank had notice of the damages, unless the

bank proves that it did not pay because of a reasonable doubt concerning the

right of the beneficiary to payment.

(b) If a payment

order accepted by the beneficiary's bank instructs payment to an account of the

beneficiary, the bank is obliged to notify the beneficiary of receipt of the

order before midnight of the next funds-transfer business day following the

payment date. If the payment order does not instruct payment to an account of

the beneficiary, the bank is required to notify the beneficiary only if notice

is required by the order. Notice may be given by first class mail or any other

means reasonable in the circumstances. If the bank fails to give the required

notice, the bank is obliged to pay interest to the beneficiary on the amount of

the payment order from the day notice should have been given until the day the

beneficiary learned of receipt of the payment order by the bank. No other

damages are recoverable. Reasonable attorney's fees are also recoverable if

demand for interest is made and refused before an action is brought on the

claim.

(c) The right of

a beneficiary to receive payment and damages as stated in subsection (a) may

not be varied by agreement or a funds-transfer system rule. The right of a beneficiary

to be notified as stated in subsection (b) may be varied by agreement of the

beneficiary or by a funds-transfer system rule if the beneficiary is notified

of the rule before initiation of the funds transfer. (Added 1993, No. 158 (Adj.

Sess.), § 14, eff. Jan. 1, 1995.)
Read Entire Law on legislature.vermont.gov