§ 4-4.5-303 — Erroneous execution of payment order

Colorado § 4-4.5-303

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

Text

(a) A receiving bank
that (i) executes the payment order of the sender by issuing a payment order in an
amount greater than the amount of the sender's order, or (ii) issues a payment order
in execution of the sender's order and then issues a duplicate order, is entitled to
payment of the amount of the sender's order under section 4-4.5-402(c) if that
subsection is otherwise satisfied. The bank is entitled to recover from the
beneficiary of the erroneous order the excess payment received to the extent
allowed by the law governing mistake and restitution.

(b) A receiving bank that executes the payment order of the sender by
issuing a payment order in an amount less than the amount of the sender's order is
entitled to payment of the amount of the sender's order under section 4-4.5-402(c)
if (i) that subsection is otherwise satisfied and (ii) the bank corrects its mistake by
issuing an additional payment order for the benefit of the beneficiary of the
sender's order. If the error is not corrected, the issuer of the erroneous order is
entitled to receive or retain payment from the sender of the order it accepted only
to the extent of the amount of the erroneous order. This subsection (b) does not
apply if the receiving bank executes the sender's payment order by issuing a
payment order in an amount less than the amount of the sender's order for the
purpose of obtaining payment of its charges for services and expenses pursuant to
instruction of the sender.

(c) If a receiving bank executes the payment order of the sender by issuing a
payment order to a beneficiary different from the beneficiary of the sender's order
and the funds transfer is completed on the basis of that error, the sender of the
payment order that was erroneously executed and all previous senders in the funds
transfer are not obliged to pay the payment orders they issued. The issuer of the
erroneous order is entitled to recover from the beneficiary of the order the payment
received to the extent allowed by the law governing mistake and restitution.

Legislative History

Source: L. 90: Entire article added, p. 354, � 1, effective January 1, 1991.