Missouri Revised Statutes
Chapter 400
Uniform Commercial Code
←400.4A-201
Section 400.4A-202.1
400.4A-203→
August 28, 2015
Authorized and verified payment orders.
400.4A-202. (a) A payment order received by the receiving bank is the
authorized order of the person identified as sender if that person authorized
the order or is otherwise bound by it under the law of agency.
(b) If a bank and its customer have agreed that the authenticity of
payment orders issued to the bank in the name of the customer as sender will
be verified pursuant to a security procedure, a payment order received by the
receiving bank is effective as the order of the customer, whether or not
authorized, if (i) the security procedure is a commercially reasonable method
of providing security against unauthorized payment orders, and (ii) the bank
proves that it accepted the payment order in good faith and in compliance
with the security procedure and any written agreement or instruction of the
customer restricting acceptance of payment orders issued in the name of the
customer. The bank is not required to follow an instruction that violates a
written agreement with the customer or notice of which is not received at a
time and in a manner affording the bank a reasonable opportunity to act on it
before the payment order is accepted.
(c) Commercial reasonableness of a security procedure is a question of
law to be determined by considering the wishes of the customer expressed to
the bank, the circumstances of the customer known to the bank, including the
size, type, and frequency of payment orders normally issued by the customer
to the bank, alternative security procedures offered to the customer, and
security procedures in general use by customers and receiving banks similarly
situated. A security procedure is deemed to be commercially reasonable if
(i) the security procedure was chosen by the customer after the bank offered,
and the customer refused, a security procedure that was commercially
reasonable for that customer, and (ii) the customer expressly agreed in
writing to be bound by any payment order, whether or not authorized, issued in
its name and accepted by the bank in compliance with the security procedure
chosen by the customer.
(d) The term "sender" in this Article includes the customer in whose name
a payment order is issued if the order is the authorized order of the
customer under subsection (a), or it is effective as the order of the
customer under subsection (b).
(e) This section applies to amendments and cancellations of payment
orders to the same extent it applies to payment orders.
(f) Except as provided in this section and in section 400.4A-203(a)(1),
rights and obligations arising under this section or section 400.4A-203 may
not be varied by agreement.
(L. 1992 S.B. 448)
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