(1) Subject to subsection (5) of Section 4-A-211 and subsections (4)
and (5) of Section 4-A-405, the originator of a funds transfer pays the
beneficiary of the originator's payment order (i) at the time a payment
order for the benefit of the beneficiary is accepted by the
beneficiary's bank in the funds transfer and (ii) in an amount equal to
the amount of the order accepted by the beneficiary's bank, but not more
than the amount of the originator's order.
(2) If payment under subsection (1) is made to satisfy an obligation,
the obligation is discharged to the same extent discharge would result
from payment to the beneficiary of the same amount in money, unless (i)
the payment under subsection (1) was made by a means prohibited by the
contract of the beneficiary with respect to the obligation, (ii) the
beneficiary, within a reasonable time after receiving notice of receipt
of the order by the beneficiary's bank, notified the originator of the
beneficiary's refusal of the payment, (iii) funds with respect to the
order were not withdrawn by the beneficiary or applied to a debt of the
beneficiary, and (iv) the beneficiary would suffer a loss that could
reasonably have been avoided if payment had been made by a means
complying with the contract. If payment by the originator does not
result in discharge under this section, the originator is subrogated to
the rights of the beneficiary to receive payment from the beneficiary's
bank under subsection (1) of Section 4-A-404.
(3) For the purpose of determining whether discharge of an obligation
occurs under subsection (2), if the beneficiary's bank accepts a payment
order in an amount equal to the amount of the originator's payment order
less charges of one or more receiving banks in the funds transfer,
payment to the beneficiary is deemed to be in the amount of the
originator's order unless upon demand by the beneficiary the originator
does not pay the beneficiary the amount of the deducted charges.
(4) Rights of the originator or of the beneficiary of a funds transfer
under this section may be varied only by agreement of the originator and
the beneficiary.
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.