§ 4-4.5-402 — Obligation of sender to pay receiving bank

Colorado § 4-4.5-402

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

Text

(a) This section is
subject to sections 4-4.5-205 and 4-4.5-207.

(b) With respect to a payment order issued to the beneficiary's bank,
acceptance of the order by the bank obliges the sender to pay the bank the amount
of the order, but payment is not due until the payment date of the order.

(c) This subsection (c) is subject to subsection (e) of this section and to
section 4-4.5-303. With respect to a payment order issued to a receiving bank other
than the beneficiary's bank, acceptance of the order by the receiving bank obliges
the sender to pay the bank the amount of the sender's order. Payment by the
sender is not due until the execution date of the sender's order. The obligation of
that sender to pay its payment order is excused if the funds transfer is not
completed by acceptance by the beneficiary's bank of a payment order instructing
payment to the beneficiary of that sender's payment order.

(d) If the sender of a payment order pays the order and was not obliged to
pay all or part of the amount paid, the bank receiving payment is obliged to refund
payment to the extent the sender was not obliged to pay. Except as provided in
sections 4-4.5-204 and 4-4.5-304, interest is payable on the refundable amount
from the date of payment.

(e) If a funds transfer is not completed as stated in subsection (c) of this
section and an intermediary bank is obliged to refund payment as stated in
subsection (d) of this section but is unable to do so because not permitted by
applicable law or because the bank suspends payments, a sender in the funds
transfer that executed a payment order in compliance with an instruction, as stated
in section 4-4.5-302(a)(1), to route the funds transfer through that intermediary
bank is entitled to receive or retain payment from the sender of the payment order
that it accepted. The first sender in the funds transfer that issued an instruction
requiring routing through that intermediary bank is subrogated to the right of the
bank that paid the intermediary bank to refund as stated in subsection (d) of this
section.

(f) The right of the sender of a payment order to be excused from the
obligation to pay the order as stated in subsection (c) of this section or to receive
refund under subsection (d) of this section may not be varied by agreement.

Legislative History

Source: L. 90: Entire article added, p. 356, � 1, effective January 1, 1991.