70A-4a-210 - Rejection of payment order.
70A-4a-210. Rejection of payment order.
(1) A payment order is rejected by the receiving bank by a notice of rejection transmittedto the sender orally, electronically, or in writing. A notice of rejection need not use any particularwords and is sufficient if it indicates that the receiving bank is rejecting the order or will notexecute or pay the order. Rejection is effective when the notice is given if transmission is by ameans that is reasonable in the circumstances. If notice of rejection is given by a means that isnot commercially reasonable, rejection is effective when the notice is received. If an agreementof the sender and receiving bank establishes the means to be used to reject a payment order:
(a) any means complying with the agreement is commercially reasonable; and
(b) any means not complying is not commercially reasonable unless no significant delayin receipt of the notice resulted from the use of the noncomplying means.
(2) This subsection applies if a receiving bank other than the beneficiary's bank fails toexecute a payment order despite the existence on the execution date of a withdrawable creditbalance in an authorized account of the sender sufficient to cover the order. If the sender does notreceive notice of rejection of the order on the execution date and the authorized account of thesender does not bear interest, the bank is obliged to pay interest to the sender on the amount of theorder for the number of days elapsing after the execution date to the earlier of the day the order iscanceled pursuant to Section 70A-4a-211 or the day the sender receives notice or learns that theorder was not executed, counting the final day of the period as an elapsed day. If thewithdrawable credit balance during that period falls below the amount of the order, the amount ofinterest is reduced accordingly.
(3) If a receiving bank suspends payments, all unaccepted payment orders issued to thebank are deemed rejected at the time the bank suspends payments.
(4) Acceptance of a payment order precludes a later rejection of the order. Rejection of apayment order precludes a later acceptance of the order.
Amended by Chapter 237, 1993 General Session