TITLE 6A

Uniform Commercial Code

CHAPTER 6A-4.1

Funds Transfers

PART 6A-4.1-301

Execution of Sender's Payment Order by Receiving Bank

SECTION 6A-4.1-302



   § 6A-4.1-302  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 § 6A-4.1-209(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 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.



   (b) Unless otherwise instructed, a receiving bank executing a

payment order may (i) use any funds transfer system if use of that system is

reasonable in the circumstances, and (ii) 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 to be 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 would unduly delay completion of the funds transfer.



   (c) Unless subsection (a)(2) 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 means reasonable in the

circumstances. 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 means as

expeditious as the means stated.



   (d) Unless instructed by the sender, (i) 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 (ii) may not instruct a subsequent receiving bank to obtain

payment of its charges in the same manner.



History of Section.

(P.L. 1991, ch. 189, § 1.)