§ 4-4.5-302 — Obligations of receiving bank in execution of payment order

Colorado § 4-4.5-302

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

Text

(a)
Except as provided in subsections (b) through (d) of this section, if the receiving
bank accepts a payment order pursuant to section 4-4.5-209 (a), the bank has the
following obligations in executing the order:

(1) The receiving bank is obliged to issue, on the execution date, a payment
order complying with the sender's order and to follow the sender's instructions
concerning (i) any intermediary bank or funds-transfer system to be used in
carrying out the funds transfer, or (ii) the means by which payment orders are to be
transmitted in the funds transfer. If the originator's bank issues a payment order to
an intermediary bank, the originator's bank is obliged to instruct the intermediary
bank according to the instruction of the originator. An intermediary bank in the
funds transfer is similarly bound by an instruction given to it by the sender of the
payment order it accepts.

(2) If the sender's instruction states that the funds transfer is to be carried
out telephonically or by wire transfer or otherwise indicates that the funds transfer
is to be carried out by the most expeditious means, the receiving bank is obliged to
transmit its payment order by the most expeditious available means, and to instruct
any intermediary bank accordingly. If a sender's instruction states a payment date,
the receiving bank is obliged to transmit its payment order at a time and by means
reasonably necessary to allow payment to the beneficiary on the payment date or
as soon thereafter as is feasible.

(b) Unless otherwise instructed, a receiving bank executing a payment order
may (i) use any funds-transfer system if use of that system is reasonable in the
circumstances, and (ii) issue a payment order to the beneficiary's bank or to an
intermediary bank through which a payment order conforming to the sender's order
can expeditiously be issued to the beneficiary's bank if the receiving bank exercises
ordinary care in the selection of the intermediary bank. A receiving bank is not
required to follow an instruction of the sender designating a funds-transfer system
to be used in carrying out the funds transfer if the receiving bank, in good faith,
determines that it is not feasible to follow the instruction or that following the
instruction would unduly delay completion of the funds transfer.

(c) Unless subsection (a)(2) of this section applies or the receiving bank is
otherwise instructed, the bank may execute a payment order by transmitting its
payment order by first class mail or by any means reasonable in the circumstances.
If the receiving bank is instructed to execute the sender's order by transmitting its
payment order by a particular means, the receiving bank may issue its payment
order by the means stated or by any means as expeditious as the means stated.

(d) Unless instructed by the sender, (i) the receiving bank may not obtain
payment of its charges for services and expenses in connection with the execution
of the sender's order by issuing a payment order in an amount equal to the amount
of the sender's order less the amount of the charges, and (ii) may not instruct a
subsequent receiving bank to obtain payment of its charges in the same manner.

Legislative History

Source: L. 90: Entire article added, p. 353, � 1, effective January 1, 1991.