(1) Subject to subsection (5) of Section 4-A-211 and subsections (4)
and (5) of Section 4-A-405, if a beneficiary's bank accepts a payment
order, the bank is obliged to pay the amount of the order to the
beneficiary of the order. Payment is due on the payment date of the
order, but if acceptance occurs on the payment date after the close of
the funds-transfer business day of the bank, payment is due on the next
funds-transfer business day. If the bank refuses to pay after demand by
the beneficiary and receipt of notice of particular circumstances that
will give rise to consequential damages as a result of nonpayment, the
beneficiary may recover damages resulting from the refusal to pay to the
extent the bank had notice of the damages, unless the bank proves that
it did not 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 account of the beneficiary, the bank is obliged to notify
the beneficiary of receipt of the order before midnight of the next
funds-transfer business day following the payment date. If the payment
order does not instruct payment to an account of the beneficiary, the
bank is required to notify the beneficiary only if notice is required by
the order. Notice may be given by first class mail or any other means
reasonable in the circumstances. If the bank fails to give the required
notice, the bank is obliged to pay interest to the beneficiary on the
amount of the payment order from the day notice should have been given
until the day the beneficiary learned of receipt of the payment order by
the bank. No other damages are recoverable. Reasonable attorney's fees
are also recoverable if demand for interest is made and refused 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 funds-transfer system rule if the beneficiary is notified of the
rule before initiation of the funds transfer.
Structure New York Laws
4-A-402 - Obligation of Sender to Pay Receiving Bank.
4-A-403 - Payment by Sender to Receiving Bank.
4-A-404 - Obligation of Beneficiary's Bank to Pay and Give Notice to Beneficiary.
4-A-405 - Payment by Beneficiary's Bank to Beneficiary.
4-A-406 - Payment by Originator to Beneficiary; Discharge of Underlying Obligation.