§ 6A-4.1-404 - Obligation of beneficiary's bank to pay and give notice to beneficiary.
SECTION 6A-4.1-404
§ 6A-4.1-404 Obligation of beneficiary'sbank to pay and give notice to beneficiary. – (a) Subject to §§ 6A-4.1-211(e), 6A-4.1-405(d), and 6A-4.1-405(e), ifa beneficiary's bank accepts a payment order, the bank is obliged to pay theamount of the order to the beneficiary of the order. Payment is due on thepayment date of the order, but if acceptance occurs on the payment date afterthe close of the funds transfer business day of the bank, payment is due on thenext funds transfer business day. If the bank refuses to pay after demand bythe beneficiary and receipt of notice of particular circumstances that willgive rise to consequential damages as a result of nonpayment, the beneficiarymay recover damages resulting from the refusal to pay to the extent the bankhad notice of the damages, unless the bank proves that it did not pay becauseof a reasonable doubt concerning the right of the beneficiary to payment.
(b) If a payment order accepted by the beneficiary's bankinstructs payment to an account of the beneficiary, the bank is obliged tonotify the beneficiary of receipt of the order before midnight of the nextfunds transfer business day following the payment date. If the payment orderdoes not instruct payment to an account of the beneficiary, the bank isrequired 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 thecircumstances. If the bank fails to give the required notice, the bank isobliged to pay interest to the beneficiary on the amount of the payment orderfrom the day notice should have been given until the day the beneficiarylearned of receipt of the payment order by the bank. No other damages arerecoverable. Reasonable attorney's fees are also recoverable if demand forinterest is made and refused before an action is brought on the claim.
(c) The right of a beneficiary to receive payment and damagesas stated in subsection (a) may not be varied by agreement or a funds transfersystem rule. The right of a beneficiary to be notified as stated in subsection(b) may be varied by agreement of the beneficiary or by a funds transfer systemrule if the beneficiary is notified of the rule before initiation of the fundstransfer.