70A-4a-404 - Obligation of beneficiary's bank to pay and give notice to beneficiary.
70A-4a-404. Obligation of beneficiary's bank to pay and give notice to beneficiary.
(1) Subject to Subsection 70A-4a-211(5) and Subsections 70A-4a-405(4) and (5), if abeneficiary's bank accepts a payment order, the bank is obliged to pay the amount of the order tothe beneficiary of the order. Payment is due on the payment date of the order, but if acceptanceoccurs on the payment date after the close of the funds transfer business day of the bank, paymentis due on the next funds transfer business day. If the bank refuses to pay after demand by thebeneficiary and receipt of notice of particular circumstances that will give rise to consequentialdamages as a result of nonpayment, the beneficiary may recover damages resulting from therefusal to pay to the extent the bank had notice of the damages, unless the bank proves that it didnot pay because of a reasonable doubt concerning the right of the beneficiary to payment.
(2) If a payment order accepted by the beneficiary's bank instructs payment to an accountof the beneficiary, the bank is obliged to give notice to the beneficiary of receipt of the orderbefore midnight of the next funds transfer business day following the payment date. If thepayment order does not instruct payment to an account of the beneficiary, the bank is required tonotify the beneficiary only if notice is required by the order. Notice may be given by first classmail or any other means reasonable in the circumstances. If the bank fails to give the requirednotice as required by this subsection, the bank is obliged to pay interest to the beneficiary on theamount of the payment order from the day notice should have been given until the day thebeneficiary learned of receipt of the payment order by the bank. No other damages arerecoverable. Reasonable attorneys' fees are also recoverable if demand for interest is made andrefused before an action is brought on the claim.
(3) The right of a beneficiary to receive payment and damages as stated in Subsection (1)may not be varied by agreement or a funds transfer system rule. The right of a beneficiary to be notified as stated in Subsection (2) may be varied by agreement of the beneficiary or by a fundstransfer system rule if the beneficiary is given notice of the rule before initiation of the fundstransfer.
Amended by Chapter 237, 1993 General Session