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Section: 400.04A.0202 Authorized and verified payment orders. RSMO 400.4A-202


Published: 2015

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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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