§4-1302. Obligations of receiving bank in execution of payment order








(1). 
 
Except as provided in subsections (2) to (4), if the receiving bank accepts a payment
order pursuant to section 4-1209, subsection (1), the bank has the following obligations
in executing the order.





(a). 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. [1991, c. 812, §2 (NEW).]













(b). If the sender's instruction states that the funds transfer is to be carried out
telephonically or by wire transfer or otherwise indicates that the funds transfer
is to be carried out by the most expeditious means, the receiving bank is obliged
to transmit its payment order by the most expeditious available means and to instruct
any intermediary bank accordingly. If a sender's instruction states a payment date,
the receiving bank is obliged to transmit its payment order at a time and by means
reasonably necessary to allow payment to the beneficiary on the payment date or as
soon thereafter as is feasible. [1991, c. 812, §2 (NEW).]







[
1991, c. 812, §2 (NEW)
.]








(2). 
 
Unless otherwise instructed, a receiving bank executing a payment order may:





(a). Use any funds transfer system if use of that system is reasonable in the circumstances;
and [1991, c. 812, §2 (NEW).]










(b). Issue a payment order to the beneficiary's bank or to an intermediary bank through
which a payment order conforming to the sender's order can expeditiously be issued
to the beneficiary's bank if the receiving bank exercises ordinary care in the selection
of the intermediary bank. A receiving bank is not required to follow an instruction
of the sender designating a funds transfer system used in carrying out the funds transfer
if the receiving bank, in good faith, determines that it is not feasible to follow
the instruction or that following the instruction unduly delays completion of the
funds transfer. [1991, c. 812, §2 (NEW).]







[
1991, c. 812, §2 (NEW)
.]








(3). 
 
Unless subsection (1), paragraph (b) applies or the receiving bank is otherwise
instructed, the bank may execute a payment order by transmitting its payment order
by first class mail or by any reasonable means. If the receiving bank is instructed
to execute the sender's order by transmitting its payment order by a particular means,
the receiving bank may issue its payment order by the means stated or by any equivalent
means.


[
1991, c. 812, §2 (NEW)
.]








(4). 
 
Unless instructed by the sender:





(a). The receiving bank may not obtain payment of its charges for services and expenses
in connection with the execution of the sender's order by issuing a payment order
in an amount equal to the amount of the sender's order less the amount of the charges;
and [1991, c. 812, §2 (NEW).]










(b). May not instruct a subsequent receiving bank to obtain payment of its charges in
the same manner. [1991, c. 812, §2 (NEW).]







[
1991, c. 812, §2 (NEW)
.]





SECTION HISTORY

1991, c. 812, §2 (NEW).