Sec. 42a-4A-210. Rejection of payment order.
Sec. 42a-4A-210. Rejection of payment order. (a) A payment order is rejected
by the receiving bank by a notice of rejection transmitted to the sender orally, electronically, or in writing. A notice of rejection need not use any particular words and is sufficient if it indicates that the receiving bank is rejecting the order or will not execute or
pay the order. Rejection is effective when the notice is given if transmission is by a
means that is reasonable in the circumstances. If notice of rejection is given by a means
that is not reasonable, rejection is effective when the notice is received. If an agreement
of the sender and receiving bank establishes the means to be used to reject a payment
order, (i) any means complying with the agreement is reasonable and (ii) any means not
complying is not reasonable unless no significant delay in receipt of the notice resulted
from the use of the noncomplying means.
(b) This subsection applies if a receiving bank other than the beneficiary's bank fails
to execute a payment order despite the existence on the execution date of a withdrawable
credit balance in an authorized account of the sender sufficient to cover the order. If the
sender does not receive notice of rejection of the order on the execution date and the
authorized account of the sender does not bear interest, the bank is obliged to pay interest
to the sender on the amount of the order for the number of days elapsing after the
execution date to the earlier of the day the order is cancelled pursuant to subsection (d)
of section 42a-4A-211 or the day the sender receives notice or learns that the order was
not executed, counting the final day of the period as an elapsed day. If the withdrawable
credit balance during that period falls below the amount of the order, the amount of
interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted payment orders issued
to it are deemed rejected at the time the bank suspends payments.
(d) Acceptance of a payment order precludes a later rejection of the order. Rejection
of a payment order precludes a later acceptance of the order.
(P.A. 90-202, S. 1(4A-210), 3.)