70A-4a-302 - Obligations of receiving bank in execution of payment order.
70A-4a-302. Obligations of receiving bank in execution of payment order.
(1) Except as provided in Subsections (2) through (4), if the receiving bank accepts apayment order pursuant to Subsection 70A-4a-209(1), the bank has the following obligations inexecuting the order:
(a) The receiving bank is obliged to issue, on the execution date, a payment ordercomplying with the sender's order and to follow the sender's instructions concerning anyintermediary bank or funds transfer system to be used in carrying out the funds transfer, or themeans by which payment orders are to be transmitted in the funds transfer. If the originator'sbank issues a payment order to an intermediary bank, the originator's bank is obliged to instructthe intermediary bank according to the instruction of the originator. An intermediary bank in thefunds transfer is similarly bound by an instruction given to it by the sender of the payment orderit accepts.
(b) If the sender's instruction states that the funds transfer is to be carried outtelephonically or by wire transfer or otherwise indicates that the funds transfer is to be carried outby the most expeditious means, the receiving bank is obliged to transmit its payment order by themost expeditious available means, and to instruct any intermediary bank accordingly. If asender's instruction states a payment date, the receiving bank is obliged to transmit its paymentorder at a time and by means reasonably necessary to allow payment to the beneficiary on thepayment date or as soon thereafter as is feasible.
(2) (a) 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 throughwhich a payment order conforming to the sender's order can expeditiously be issued to thebeneficiary's bank if the receiving bank exercises ordinary care in the selection of theintermediary bank.
(b) A receiving bank is not required to follow an instruction of the sender designating afunds transfer system to be used in carrying out the funds transfer if the receiving bank, in goodfaith, determines that it is not feasible to follow the instruction or that following the instructionwould unduly delay completion of the funds transfer.
(3) Unless Subsection (1)(b) applies or the receiving bank is otherwise instructed, thebank may execute a payment order by transmitting its payment order by first class mail or by anymeans that are reasonable in the circumstances. If the receiving bank is instructed to execute thesender's order by transmitting its payment order by a particular means, the receiving bank mayissue its payment order by the means stated or by any means as expeditious as the means stated ifthe means used are reasonable in the circumstances.
(4) Unless instructed by the sender:
(a) the receiving bank may not obtain payment of its charges for services and expenses inconnection with the execution of the sender's order by issuing a payment order in an amountequal to the amount of the sender's order less the amount of the charges; and
(b) may not instruct a subsequent receiving bank to obtain payment of its charges in thesame manner.
Amended by Chapter 12, 1994 General Session