§4-1303. Erroneous execution of payment order


Published: 2015

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§4-1303. Erroneous execution of payment order








(1). 
 
A receiving bank that 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 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 4-1402, subsection (3)
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.


[
1991, c. 812, §2 (NEW)
.]








(2). 
 
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 4-1402, subsection (3) if that subsection
is otherwise satisfied and 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 an instruction of the sender.


[
1991, c. 812, §2 (NEW)
.]








(3). 
 
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.


[
1991, c. 812, §2 (NEW)
.]





SECTION HISTORY

1991, c. 812, §2 (NEW).

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