§ 554.3418 — Payment or acceptance by mistake

Iowa § 554.3418

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

1. Except as provided in subsection 3, if the drawee of a draft pays or accepts the draft
and the drawee acted on the mistaken belief that payment of the draft had not been stopped
pursuant to section 554.4403 or the signature of the drawer of the draft was authorized, the
drawee may recover the amount of the draft from the person to whom or for whose benefit
payment was made or, in the case of acceptance, may revoke the acceptance. Rights of the
drawee under this subsection are not affected by failure of the drawee to exercise ordinary
care in paying or accepting the draft.
2. Except as provided in subsection 3, if an instrument has been paid or accepted by
mistake and the case is not covered by subsection 1, the person paying or accepting may, to
the extent permitted by the law governing mistake and restitution, recover the payment from
the person to whom or for whose benefit payment was made or in the case of acceptance,
may revoke the acceptance.

3. The remedies provided by subsection 1 or 2 may not be asserted against a person who
took the instrument in good faith and for value or who in good faith changed position in
reliance on the payment or acceptance. This subsection does not limit remedies provided by
section 554.3417 or 554.4407.
4. Notwithstanding section 554.4215, if an instrument is paid or accepted by mistake and
the payor or acceptor recovers payment or revokes acceptance under subsection 1 or 2, the
instrument is deemed not to have been paid or accepted and is treated as dishonored, and
the person from whom payment is recovered has rights as a person entitled to enforce the
dishonored instrument.