§4A-303. Erroneous execution of payment order

Link to law: http://legislature.vermont.gov/statutes/section/09A/004A/00303
Published: 2015

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The Vermont Statutes Online



Title

09A

:
Uniform Commercial Code






Chapter

004A

:
Funds Transfers











 

§

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 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 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 beneficiary of the

sender's order. If the error is not corrected, the issuer of the erroneous

order is entitled to receive or retain payment from the sender of the order it

accepted only to the extent of the amount of the erroneous order. This

subsection does not apply if the receiving bank executes the sender's payment

order by issuing a payment order in an amount less than the amount of the

sender's order for the purpose of obtaining payment of its charges for services

and expenses pursuant to instruction of the sender.

(c) If a

receiving bank executes the payment order of the sender by issuing a payment

order to a beneficiary different from the beneficiary of the sender's order and

the funds transfer is completed on the basis of that error, the sender of the

payment order that was erroneously executed and all previous senders in the

funds transfer are not obliged to pay the payment orders they issued. The

issuer of the erroneous order is entitled to recover from the beneficiary of

the order the payment received to the extent allowed by the law governing

mistake and restitution. (Added 1993, No. 158 (Adj. Sess.), § 14, eff. Jan. 1,

1995.)
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