§ 4-4.5-211 — Cancellation and amendment of payment order

Colorado § 4-4.5-211

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Funds Transfers

Text

(a) A
communication of the sender of a payment order canceling or amending the order
may be transmitted to the receiving bank orally or in a record. If a security
procedure is in effect between the sender and the receiving bank, the
communication is not effective to cancel or amend the order unless the
communication is verified pursuant to the security procedure or the bank agrees to
the cancellation or amendment.

(b) Subject to subsection (a) of this section, a communication by the sender
canceling or amending a payment order is effective to cancel or amend the order if
notice of the communication is received at a time and in a manner affording the
receiving bank a reasonable opportunity to act on the communication before the
bank accepts the payment order.

(c) After a payment order has been accepted, cancellation or amendment of
the order is not effective unless the receiving bank agrees or a funds-transfer
system rule allows cancellation or amendment without agreement of the bank.

(1) With respect to a payment order accepted by a receiving bank other than
the beneficiary's bank, cancellation or amendment is not effective unless a
conforming cancellation or amendment of the payment order issued by the
receiving bank is also made.

(2) With respect to a payment order accepted by the beneficiary's bank,
cancellation or amendment is not effective unless the order was issued in execution
of an unauthorized payment order, or because of a mistake by a sender in the funds
transfer which resulted in the issuance of a payment order (i) that is a duplicate of a
payment order previously issued by the sender, (ii) that orders payment to a
beneficiary not entitled to receive payment from the originator, or (iii) that orders
payment in an amount greater than the amount the beneficiary was entitled to
receive from the originator. If the payment order is canceled or amended, the
beneficiary's bank is entitled to recover from the beneficiary any amount paid to the
beneficiary to the extent allowed by the law governing mistake and restitution.

(d) An unaccepted payment order is canceled by operation of law at the
close of the fifth funds-transfer business day of the receiving bank after the
execution date or payment date of the order.

(e) A canceled payment order cannot be accepted. If an accepted payment
order is canceled, the acceptance is nullified and no person has any right or
obligation based on the acceptance. Amendment of a payment order is deemed to
be cancellation of the original order at the time of amendment and issue of a new
payment order in the amended form at the same time.

(f) Unless otherwise provided in an agreement of the parties or in a funds-transfer system rule, if the receiving bank, after accepting a payment order, agrees
to cancellation or amendment of the order by the sender or is bound by a funds-transfer system rule allowing cancellation or amendment without the bank's
agreement, the sender, whether or not cancellation or amendment is effective, is
liable to the bank for any loss and expenses, including reasonable attorney's fees,
incurred by the bank as a result of the cancellation or amendment or attempted
cancellation or amendment.

(g) A payment order is not revoked by the death or legal incapacity of the
sender unless the receiving bank knows of the death or of an adjudication of
incapacity by a court of competent jurisdiction and has reasonable opportunity to
act before acceptance of the order.

(h) A funds-transfer system rule is not effective to the extent it conflicts
with subsection (c)(2) of this section.

Legislative History

Source: L. 90: Entire article added, p. 351, � 1, effective January 1, 1991. L. 2023: (a) amended, (SB 23-090), ch. 136, p. 534, � 31, effective August 7.