§ 26-1-3.1-418 — Payment or acceptance by mistake

Indiana § 26-1-3.1-418

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 3.1: Negotiable Instruments

Text

(a) Except as provided in subsection (c),
if the drawee of a draft pays or accepts the draft and the drawee acted
on the mistaken belief that:
(1) payment of the draft had not been stopped under IC 26-1-4-403; or
(2) 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.
(b) Except as provided in subsection (c), if an instrument has been
paid or accepted by mistake and the case is not covered by subsection
(a), the person paying or accepting may, to the extent permitted by the
law governing mistake and restitution:
(1) recover the payment from the person to whom or for whose
benefit payment was made; or
(2) in the case of acceptance, may revoke the acceptance.
(c) The remedies provided by subsection (a) or (b) 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 IC 26-1-3.1-417 or IC 26-1-4-407.
(d) Notwithstanding IC 26-1-4-215, if an instrument is paid or
accepted by mistake and the payor or acceptor recovers payment or
revokes acceptance under subsection (a) or (b), 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.

Legislative History

As added by P.L.222-1993, SEC.5.