4A205 - Erroneous payment orders.

     § 4A205.  Erroneous payment orders.        (a)  Types of erroneous payment orders.--            (1)  The rules set forth under paragraph (2) apply if an        accepted payment order was transmitted pursuant to a security        procedure for the detection of error and the payment order:                (i)  erroneously instructed payment to a beneficiary            not intended by the sender;                (ii)  erroneously instructed payment in an amount            greater than the amount intended by the sender; or                (iii)  was an erroneously transmitted duplicate of a            payment order previously sent by the sender.            (2)  (i)  If the sender proves that the sender or a            person acting on behalf of the sender pursuant to section            4A206 (relating to transmission of payment order through            funds-transfer or other communication system) complied            with the security procedure and that the error would have            been detected if the receiving bank had also complied,            the sender is not obliged to pay the order to the extent            stated in subparagraphs (ii) and (iii).                (ii)  If the funds transfer is completed on the basis            of an erroneous payment order described in paragraph            (1)(i) or (iii), the sender is not obliged to pay the            order and the receiving bank is entitled to recover from            the beneficiary any amount paid to the beneficiary to the            extent allowed by the law governing mistake and            restitution.                (iii)  If the funds transfer is completed on the            basis of a payment order described in paragraph (1)(ii),            the sender is not obliged to pay the order to the extent            the amount received by the beneficiary is greater than            the amount intended by the sender. In that case, the            receiving bank is entitled to recover from the            beneficiary the excess amount received to the extent            allowed by the law governing mistake and restitution.        (b)  Duty of sender.--If the sender of an erroneous payment     order described in subsection (a) is not obliged to pay all or     part of the order and the sender receives notification from the     receiving bank that the order was accepted by the bank or that     the sender's account was debited with respect to the order, the     sender has a duty to exercise ordinary care, on the basis of     information available to the sender, to discover the error with     respect to the order and to advise the bank of the relevant     facts within a reasonable time, not exceeding 90 days, after the     bank's notification was received by the sender. If the bank     proves that the sender failed to perform that duty, the sender     is liable to the bank for the loss the bank proves it incurred     as a result of the failure, but the liability of the sender may     not exceed the amount of the sender's order.        (c)  Amendments to payment orders.--This section applies to     amendments to payment orders to the same extent it applies to     payment orders.        Cross References.  Section 4A205 is referred to in section     4A402 of this title.