8.4A-405 - A-405. Payment by beneficiary's bank to beneficiary.
§ 8.4A-405. Payment by beneficiary's bank to beneficiary.
(a) If the beneficiary's bank credits an account of the beneficiary of apayment order, payment of the bank's obligation under subsection (a) of §8.4A-404 occurs when and to the extent (i) the beneficiary is notified of theright to withdraw the credit, (ii) the bank lawfully applies the credit to adebt of the beneficiary, or (iii) funds with respect to the order areotherwise made available to the beneficiary by the bank.
(b) If the beneficiary's bank does not credit an account of the beneficiaryof a payment order, the time when payment of the bank's obligation undersubsection (a) of § 8.4A-404 occurs is governed by principles of law thatdetermine when an obligation is satisfied.
(c) Except as stated in subsections (d) and (e) of this section, if thebeneficiary's bank pays the beneficiary of a payment order under a conditionto payment or agreement of the beneficiary giving the bank the right torecover payment from the beneficiary if the bank does not receive payment ofthe order, the condition to payment or agreement is not enforceable.
(d) A funds-transfer system rule may provide that payments made tobeneficiaries of funds transfers made through the system are provisionaluntil receipt of payment by the beneficiary's bank of the payment order isaccepted. A beneficiary's bank that makes a payment that is provisional underthe rule is entitled to refund from the beneficiary if (i) the rule requiresthat both the beneficiary and the originator be given notice of theprovisional nature of the payment before the funds transfer is initiated,(ii) the beneficiary, the beneficiary's bank, and the originator's bankagreed to be bound by the rule, and (iii) the beneficiary's bank did notreceive payment of the payment order that it accepted. If the beneficiary isobliged to refund payment to the beneficiary's bank, acceptance of thepayment order by the beneficiary's bank is nullified and no payment by theoriginator of the funds transfer to the beneficiary occurs under § 8.4A-406.
(e) This subsection applies to a funds transfer that includes a payment ordertransmitted over a funds-transfer system that (i) nets obligationsmultilaterally among participants, and (ii) has in effect a loss-sharingagreement among participants for the purpose of providing funds necessary tocomplete settlement of the obligations of one or more participants that donot meet their settlement obligations. If the beneficiary's bank in thefunds transfer accepts a payment order and the system fails to completesettlement pursuant to its rules with respect to any payment order in thefunds transfer, (i) the acceptance by the beneficiary's bank is nullified andno person has any right or obligation based on the acceptance, (ii) thebeneficiary's bank is entitled to recover payment from the beneficiary, (iii)no payment by the originator to the beneficiary occurs under § 8.4A-406 and(iv) subject to subsection (e) of § 8.4A-402, each sender in the fundstransfer is excused from its obligation to pay its payment order undersubsection (c) of § 8.4A-402 because the funds transfer has not beencompleted.
(1990, c. 9.)