70A-4a-204 - Refund of payment and duty of customer to report with respect to unauthorized payment order.
70A-4a-204. Refund of payment and duty of customer to report with respect tounauthorized payment order.
(1) (a) If a receiving bank accepts a payment order issued in the name of its customer assender which is not authorized and not effective as the order of the customer under Section70A-4a-202, or not enforceable, in whole or in part, against the customer under Section70A-4a-203, the bank shall refund any payment of the payment order received from the customerto the extent the bank is not entitled to enforce payment, and shall pay interest on the refundableamount calculated from the date the bank received payment to the date of the refund.
(b) However, the customer is not entitled to interest from the bank on the amount to berefunded if the customer fails to exercise ordinary care to determine that the order was notauthorized by the customer and to notify the bank of the relevant facts within a reasonable timenot exceeding 90 days after the date the customer received notification from the bank that theorder was accepted or that the customer's account was debited with respect to the order.
(c) The bank is not entitled to any recovery from the customer on account of a failure bythe customer to give notification as stated in this section.
(2) Reasonable time under Subsection (1) may be fixed by agreement as stated inSubsection 70A-1a-302(2), but the obligation of a receiving bank to refund payment as stated inSubsection (1) may not otherwise be varied by agreement.
Amended by Chapter 272, 2007 General Session