8.4A-210 - A-210. Rejection of payment order.
§ 8.4A-210. Rejection of payment order.
(a) A payment order is rejected by the receiving bank by a notice ofrejection transmitted to the sender orally, electronically, or in writing. Anotice of rejection need not use any particular words and is sufficient if itindicates that the receiving bank is rejecting the order or will not executeor pay the order. Rejection is effective when the notice is given iftransmission is by a means that is reasonable in the circumstances. Ifnotice of rejection is given by a means that is not reasonable, rejection iseffective when the notice is received. If an agreement of the sender andreceiving bank establishes the means to be used to reject a payment order,(i) any means complying with the agreement is reasonable and (ii) any meansnot complying is not reasonable unless no significant delay in receipt of thenotice resulted from the use of the noncomplying means.
(b) This subsection applies if a receiving bank other than the beneficiary'sbank fails to execute a payment order despite the existence on the executiondate of a withdrawable credit balance in an authorized account of the sendersufficient to cover the order. If the sender does not receive notice ofrejection of the order on the execution date and the authorized account ofthe sender does not bear interest, the bank is obliged to pay interest to thesender on the amount of the order for the number of days elapsing after theexecution date to the earlier of the day the order is canceled pursuant tosubsection (d) of § 8.4A-211 or the day the sender receives notice or learnsthat the order was not executed, counting the final day of the period as anelapsed day. If the withdrawable credit balance during that period fallsbelow the amount of the order, the amount of interest is reduced accordingly.
(c) If a receiving bank suspends payments, all unaccepted payment ordersissued to it are deemed rejected at the time the bank suspends payments.
(d) Acceptance of a payment order precludes a later rejection of the order.Rejection of a payment order precludes a later acceptance of the order.
(1990, c. 9.)