§ 26-1-4.1-203 — Unenforceability of certain verified payment orders

Indiana § 26-1-4.1-203

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4.1: Fund Transfers

Text

(a) If an accepted payment order is not,
under IC 26-1-4.1-202(a), an authorized order of a customer identified
as sender, but is effective as an order of the customer pursuant to IC 26-1-4.1-202(b), the following rules apply:
(1) By express agreement, evidenced by a record, the receiving
bank may limit the extent to which it is entitled to enforce or
retain payment of the payment order.
(2) The receiving bank is not entitled to enforce or retain payment
of the payment order if the customer proves that the order was not
caused, directly or indirectly, by a person:
(i) entrusted at any time with duties to act for the customer with
respect to payment orders or the security procedure; or
(ii) who obtained access to transmitting facilities of the
customer or who obtained, from a source controlled by the
customer and without authority of the receiving bank,
information facilitating breach of the security procedure,
regardless of how the information was obtained or whether the
customer was at fault. Information includes any access device,
computer software, or the like.
(b) This section applies to amendments of payment orders to the
same extent it applies to payment orders.

Legislative History

As added by P.L.189-1991, SEC.4. Amended by P.L.199-2023, SEC.25.