§4-1404. Obligation of beneficiary's bank to pay and give notice to beneficiary








(1). 
 
Subject to section 4-1211, subsection (5), and section 4-1405, subsections (4) and
(5), if a beneficiary's bank accepts a payment order, the bank is obliged to pay the
amount of the order to the beneficiary of the order. Payment is due on the payment
date of the order, but if acceptance occurs on the payment date after the close of
the funds transfer business day of the bank, payment is due on the next funds transfer
business day. If the bank refuses to pay after demand by the beneficiary and receipt
of notice of particular circumstances that will give rise to consequential damages
as a result of nonpayment, the beneficiary may recover damages resulting from the
refusal to pay to the extent the bank had notice of the damages, unless the bank proves
that it did not pay because of a reasonable doubt concerning the right of the beneficiary
to payment.


[
1991, c. 812, §2 (NEW)
.]








(2). 
 
If a payment order accepted by the beneficiary's bank instructs payment to an account
of the beneficiary, the bank is obliged to notify the beneficiary of receipt of the
order before midnight of the next funds transfer business day following the payment
date. If the payment order does not instruct payment to an account of the beneficiary,
the bank is required to notify the beneficiary only if notice is required by the order.
Notice may be given by first class mail or any other means reasonable in the circumstances.
If the bank fails to give the required notice, the bank is obliged to pay interest
to the beneficiary on the amount of the payment order from the day notice should have
been given until the day the beneficiary learned of receipt of the payment order by
the bank. Other damages are not recoverable. Reasonable attorney's fees are also
recoverable if demand for interest is made and refused before an action is brought
on the claim.


[
1991, c. 812, §2 (NEW)
.]








(3). 
 
The right of a beneficiary to receive payment and damages as stated in subsection
(1) may not be varied by agreement or a funds transfer system rule. The right of
a beneficiary to be notified as stated in subsection (2) may be varied by agreement
of the beneficiary or by a funds transfer system rule if the beneficiary is notified
of the rule before initiation of the funds transfer.


[
1991, c. 812, §2 (NEW)
.]





SECTION HISTORY

1991, c. 812, §2 (NEW).