Sec. 42a-4A-302. Obligations of receiving bank in execution of payment order.
Sec. 42a-4A-302. Obligations of receiving bank in execution of payment order.
(a) Except as provided in subsections (b) to (d), inclusive, if the receiving bank accepts
a payment order pursuant to subsection (a) of section 42a-4A-209, the bank has the
following obligations in executing the order:
(1) The receiving bank is obliged to issue, on the execution date, a payment order
complying with the sender's order and to follow the sender's instructions concerning
(i) any intermediary bank or funds-transfer system to be used in carrying out the funds
transfer, or (ii) the means by which payment orders are to be transmitted in the funds
transfer. If the originator's bank issues a payment order to an intermediary bank, the
originator's bank is obliged to instruct the intermediary bank according to the instruction
of the originator. An intermediary bank in the funds transfer is similarly bound by an
instruction given to it by the sender of the payment order it accepts.
(2) If the sender's instruction states that the funds transfer is to be carried out telephonically or by wire transfer or otherwise indicates that the funds transfer is to be
carried out by the most expeditious means, the receiving bank is obliged to transmit its
payment order by the most expeditious available means and to instruct any intermediary
bank accordingly. If a sender's instruction states a payment date, the receiving bank is
obliged to transmit its payment order at a time and by means reasonably necessary to
allow payment to the beneficiary on the payment date or as soon thereafter as is feasible.
(b) Unless otherwise instructed, a receiving bank executing a payment order may
(i) use any funds-transfer system if use of that system is reasonable in the circumstances,
and (ii) issue a payment order to the beneficiary's bank or to an intermediary bank
through which a payment order conforming to the sender's order can expeditiously be
issued to the beneficiary's bank if the receiving bank exercises ordinary care in the
selection of the intermediary bank. A receiving bank is not required to follow an instruction of the sender designating a funds-transfer system to be used in carrying out the
funds transfer if the receiving bank, in good faith, determines that it is not feasible to
follow the instruction or that following the instruction would unduly delay completion
of the funds transfer.
(c) Unless subdivision (2) of subsection (a) applies or the receiving bank is otherwise instructed, the bank may execute a payment order by transmitting its payment order
by first class mail or by any means reasonable in the circumstances. If the receiving
bank is instructed to execute the sender's order by transmitting its payment order by a
particular means, the receiving bank may issue its payment order by the means stated
or by any means as expeditious as the means stated.
(d) Unless instructed by the sender, (i) the receiving bank may not obtain payment
of its charges for services and expenses in connection with the execution of the sender's
order by issuing a payment order in an amount equal to the amount of the sender's order
less the amount of the charges, and (ii) may not instruct a subsequent receiving bank to
obtain payment of its charges in the same manner.
(P.A. 90-202, S. 1(4A-302), 3.)