The Vermont Statutes Online
Uniform Commercial Code
4A-402. Obligation of sender to pay receiving bank
(a) This section
is subject to sections 4A-205 and 4A-207.
(b) With respect
to a payment order issued to the beneficiary's bank, acceptance of the order by
the bank obliges the sender to pay the bank the amount of the order, but
payment is not due until the payment date of the order.
subsection is subject to subsection (e) and to section 4A-303. With respect to
a payment order issued to a receiving bank other than the beneficiary's bank,
acceptance of the order by the receiving bank obliges the sender to pay the
bank the amount of the sender's order. Payment by the sender is not due until
the execution date of the sender's order. The obligation of that sender to pay
its payment order is excused if the funds transfer is not completed by
acceptance by the beneficiary's bank of a payment order instructing payment to
the beneficiary of that sender's payment order.
(d) If the
sender of a payment order pays the order and was not obliged to pay all or part
of the amount paid, the bank receiving payment is obliged to refund payment to
the extent the sender was not obliged to pay. Except as provided in sections
4A-204 and 4A-304, interest is payable on the refundable amount from the date
(e) If a funds
transfer is not completed as stated in subsection (c) and an intermediary bank
is obliged to refund payment as stated in subsection (d) but is unable to do so
because not permitted by applicable law or because the bank suspends payments,
a sender in the funds transfer that executed a payment order in compliance with
an instruction, as stated in section 4A-302(a)(1), to route the funds transfer
through that intermediary bank is entitled to receive or retain payment from
the sender of the payment order that it accepted. The first sender in the funds
transfer that issued an instruction requiring routing through that intermediary
bank is subrogated to the right of the bank that paid the intermediary bank to
refund as stated in subsection (d).
(f) The right of
the sender of a payment order to be excused from the obligation to pay the
order as stated in subsection (c) or to receive refund under subsection (d) may
not be varied by agreement. (Added 1993, No. 158 (Adj. Sess.), § 14, eff. Jan.